According to the consolidated financial statements within ... fileİhlas Media Holding Annual Report...

1İhlas Media Holding Annual Report 2011

According to the consolidated financial statements within the framework of International financial reporting standards ( ).

Main Financial Indicators ( )

20112010

Profit for the Period

5,000,000

4,000,000

3,000,000

2,000,000

0

4,419,987 3,926,468

Net Sales Revenues

2011

110,602,460 153,140,536

2010

Total Assets

350,000,000

300,000,000

250,000,000

200,000,000

150,000,000

100,000,000

50,000,000

0

2011

342,508,308 343,794,230

2010

Shareholders’ Equity

300,000,000

250,000,000

200,000,000

150,000,000

100,000,000

50,000,000

0

2011

274,807,110 280,153,237

2010

200,000,000

150,000,000

100,000,000

50,000,000

0

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July 10, 2003

İhlas Yayın Holding A.Ş. (İhlas Media Holding) was founded.

July 16, 2003

A participation in İhlas Gazetecilik (Türkiye Gazetesi) and İhlas Haber Ajansı (İHA) was completed.

July 24, 2003

A participation in Huzur Radyo TV (TGRT) was completed.

July 15, 2004

TGRT Haber TV A.Ş. was founded.

July 27, 2004

TGRT Dijital TV Hizmetleri A.Ş. was founded.

September 28, 2006

Shares of Huzur Radyo TV were sold to News Netherlands Co. (FOX TV).

August 1, 2007

Fikirevim Reklam Ajansi was taken over and participation in Alternatif Medya Hizmetleri Ltd. Şti. was completed.

December 1, 2007

A participation in İhlas Gelişim Yayıncılık A.Ş., a company that gathers all magazine and fair works under a single roof,

was completed.

February 10, 2009

A participation in newly established company İhlas İletişim A.Ş. was completed.

December 24, 2009

In order to be involved in a residential project in Bahçeşehir, a joint venture company (ordinary partnership) was established

with İhlas Holding A.Ş. and İhlas Pazarlama A.Ş.

June 14, 2010

Shares of İhlas Gazetecilik A.Ş. began trading on the Istanbul Stock Exchange.

August 4, 2010

Public offering was initiated for İhlas Yayın Holding (İhlas Media Holding).

November 5, 2010

Shares of İhlas Yayın Holding A.Ş. (İhlas Media Holding) began trading on the Istanbul Stock Exchange.

December 14, 2010

A participation in Promaş A.Ş. and İhlas Reklam Ltd. Şti. was completed.

January 23, 2012

İhlas Yayın Holding raised its participation stake in İhlas Haber Ajansı (İHA) from 50% to 75%.

Milestones


Shareholding Structure (as of December 31, 2011)

Name / Title Share Rate % Share Amount ( )‹hlas Holding A.fi. 69.15 138,300,000Enver Ören 1.00 2,000,000Ahmet Mücahid Ören 0.90 1,800,000Other 0.20 400,000Publicly-traded 28.75 57,500,000 Total 100.00 200,000,000

‹hlas Holding A.fi.

Enver Ören

Ahmet Mücahid Ören

Other

Publicly-traded

4

İhlas Yayın Holding (Media Holding) was founded on July 10, 2003 in order to combine all its subsidiaries in the media sector under one roof and improve its administrative efficiency.

İhlas Media Holding oversees all of its subsidiaries’ operations, and provides all the necessary support for all types of investments. Its primary target is to step up the synergy among the companies in its media group. To this end, İhlas Media Holding shares its corporate-owned policies with all of its affiliates within the context of certain methods. All of the subsidiaries of İhlas Yayın Holding were established with the principle of broadcasting accurate news objectively, impartially and without agitating the public. They have maintained this consistent style since the day it was founded.

İhlas Media Holding offered its shares to the public on October 25 - 26, 2010, and İhlas Media Holding’s shares began trading on the Istanbul Stock Exchange as of November 5, 2010.

Türkiye newspaper, İhlas Yayın Holding’s subsidiary in the print media, operates in the media sector as a highly competitive media organ with an experienced management perception, consistent publishing principles, brand awareness and wide readership. Türkiye newspaper provided its readers with the opportunity to be a partner by offering its shares to the public in 2010, with the trust earned by being transparent, reliable and worthwhile. Türkiye newspaper, which continues with the same ownership structure since it was established in 1970, is a newspaper differentiating with its pages, brand, unchanging editorial principles and stable total audience and possesses a high future potential. The newspaper continues to operate with its printing plants equipped with the highest technologies, located in six different Turkish cities.

Another subsidiary of İhlas Media Holding’s, İHA’s operations provide strong agency support to national, local and regional media channels in terms of rapid and dependable access to information. Using live broadcast trucks manufactured by its own technical services team, İhlas News Agency operates both in and out of Turkey via this system and equipment. Civil commotions in Tunisia, Egypt and Libya, which hit the headlines in 2011, were followed by İHA teams and a technical service was provided to television channels worldwide.

TGRT News TV operates with the principle, “TGRT News only features news” while staying true to its identity as an objective, genuine and honest news carrier. From morning till midnight, TGRT News airs news bulletins every hour, keeping viewers up to date on world and Turkish news. In

addition to successful journalism, TGRT News also features television shows in which current affairs are debated by experts in the related topics. In 2011, TGRT News aims to make investments in renovation, renewing most of its equipment and broadcasting with HD quality.

TGRT FM wide spectrum of contests, children’s shows, cultural, artistic, women’s programs, sport, chat and magazine programs, and audio plays, the radio station appeals to every segment of society. With its journalism, programming and classical radio theatres, TGRT FM has acquired an important place in the hearts of the Turkish nation through its radio broadcasting, using the latest technology with improved developments to ensure that the listening audience derives great pleasure.

TGRT Dijital TV has been broadcasting under the name TGRT Belgesel (TGRT Documentary) since April 22, 2010 and serves the purposes of living up to culture, civilization, history and spiritual values as well as providing a service to humanity by following an editorial policy within this scope.

About İhlas Media Holding A.Ş.

ALL OF THE SUBSIDIARIES OF İHLAS YAYIN HOLDING WERE ESTABLISHED WITH THE PRINCIPLE OF BROADCASTING ACCURATE NEWS OBJECTIVELY, IMPARTIALLY AND WITHOUT AGITATING THE PUBLIC. THEY HAVE MAINTAINED THIS CONSISTENT STYLE SINCE THE DAY THEY WERE FOUNDED


The name of İhlas Advertising Agency (İhlas Reklam Ajansı) was changed to İhlas Media Marketing and Purchase Services (İhlas Medya Planlama ve Satınalma Hizmetleri Ltd. Şti). In the competitive environment of the sector, the İhlas Media Planning and Buying Services implements a continuous self renovation process, improves its quality and is known among its peers as a creative, full service agency. With special emphasis on customer satisfaction, the Company has become one of Turkey’s leading advertising agencies.

Media Holding’s subsidiary in the information technology sector, İhlas Communications, was established in 2009 and has been accredited with the MVNO license by the Information Technologies Agency to provide mobile virtual operator services through VipCell - its own brand. İhlas Gelişim A.Ş. - İhlas Magazine Group is the parent company for İletişim Magazin (Communication Magazine) and İhlas Fuarcılık (İhlas Fair Services) companies. The group enjoys a strong reputation thanks to its sector magazines, inserts, catalogues, official fair brochures and specific projects overseas. As one of Turkey’s most important magazine groups in the fields of sectoral

publishing and international publishing, İhlas Magazine Group enjoys a prominent place in the sector, regularly and continuously offering business development projects to the Turkish economy. The client base of the magazine group consists of SMEs, which also form the client base of Türkiye Newspaper. Another magazine named “Sleep Well” began broadcasting in 2011, bringing the total number of magazines up to 24. İhlas Fair Services (İhlas Fuarcılık), which organizes special fairs on a sectoral basis, has become a major brand in solar energy and pipe fairs. İhlas Fair Services, which organizes domestic and international tourism events, summits etc. is planning to enter new sectors with new fairs.

Alternatif Media (Alternatif Medya), activated its first developed IPTV based Digital Signage application, and launched on the market and continued to design new products with added value by incorporating new technologies through intensive R&D activities.With its Video On Demand system on IPTV base especially developed for universities, the company has broken into the mobile applications market with iPhone and android applications.

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Message from the Chairman

A. Mücahid Ören Chairman of the Board of Directors

İHLAS MEDIA HOLDING WILL CONTINUE TO

FOLLOW A CHANGE AND ADOPT A

STRATEGY THAT IS COMPETITIVE IN

THE FORTHCOMING PERIOD


Esteemed Shareholders,

2011 has been a considerably productive year in terms of broadcasting, and the wealth and diversity of news.

General Elections on June 12 at home and the economic crisis abroad, which especially shook Europe and caused civil street commotions, positively impacted the economic value of media companies’ print and video news productions.

At İhlas Media Group, we have naturally benefitted from this process through our news oriented channels. The international news agency İHA has availed of effective and high-income business opportunities in those countries in which economic turmoil has deepened and mass actions have spread, primarily in Greece.

On the other hand, besides conventional channels, we have organized intragroup search conferences in order to transform our current media assets in the field of electronic and digital broadcasting, which has developed and spread rapidly. We conducted a number of surveys taking the changing reader / audience profile into consideration. We have paid ultimate attention to incorporating a dynamic strategy in operating the content and the visual editing.

Starting from the fact that diversified mobile communication equipment has also turned into a media channel, we have developed some projects aimed at multi-purpose utilization of our broadcasting group’s capacity for producing mobile content.

İhlas Media Holding’s affiliates have also incorporated a number of improvements to their on-going business processes.

İhlas Journalism (İhlas Gazetecilik A.Ş.), which publishes Türkiye Newspaper, has undergone a profit and

competition oriented rehabilitation in its printing services, which provide a full service in addition to publishing. The SAP software project, which is an Enterprise Resource Planning (ERP) application, was initiated in the Group by İhlas Journalism.

TGRT News TV has adopted a competition and income oriented broadcasting prototype by adding daily programs to dynamic news reporting services.

İhlas Media Holding, which was listed on the Istanbul Stock Exchange in 2010, succeeded in entering the ISE -100 Index in 2011.

İhlas Media Holding, aware of the fact that it is the flagship of media and broadcasting activities, which have long been the backbone of activities of the İhlas Group, will continue to follow a change and adopt a strategy that is competitive in the forthcoming period.

I would like to express my sincere thanks on behalf of İhlas Holding, which has over 40 years of experience, to our dedicated employees, loyal readers, audience and subscribers and to our valuable shareholders for their trust, courtesy and unrelenting support.

Sincerely,

A. Mücahid ÖrenChairman of the Board of Directors

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Board of Directors

Orhan TANIŞMAN (1) Member of the Board of Directors and Chairman of the Corporate Governance CommitteeOrhan Tanışman was born in Istanbul in 1969. After graduating in Shipbuilding Engineering at Istanbul Technical University (ITU), he got his master’s degree from Yıldız Technical University (YTÜ), followed by his doctorate studies in investment planning at Istanbul University (IU). Meanwhile, he attended Istanbul University’s Graduate School of Business and Economics and graduated in 1999. He served as a Research Assistant at Marmara University’s Faculty of Technical Education in 1991 - 1992 and at Istanbul University’s Faculty of Engineering between 1992 and 1994. Mr. Tanışman began providing services for İhlas Holding in 1994 and since then, he has been Investor Relations Manager of İhlas Holding. Orhan Tanışman is married and has a son and a daughter. He is a member of the Corporate Administration Association of Turkey (TKYD) and the Investor Relations Association of Turkey (TÜYİD).

Melih Rüçhan ARVASİ (2) Member of the Board of Directors and Member of the Corporate Governance CommitteeMelih Rüçhan Arvasi was born in 1971 and completed his middle and high school education in Istanbul. He entered the Department of Business Administration in the Faculty of Economics and Administrative Sciences of Marmara University in 1989 and graduated with a bachelor’s degree in 1993. For two years, he did graduate studies in the branch of Financial Economics at the faculty’s Finance Department. He began working in the Finance Department at İhlas Group in 1993. In 2001, he parted ways with İhlas Group and worked in the US banking sector, where he provided services in the technology department and foreign exchange markets division for five years. Mr. Arvasi returned to Turkey in 2006 and still continues to work as the distributor and representative of two industrial institutions and one financial institution based in Canada and the USA. Melih Rüçhan Arvasi is married. He is the Founding Member of the World Turkmens Education Foundation and Friendship Association where he also serves as a member of the Board of Trustees.

Tolga SÖNMEZ (3)Member of the Board of Directors and Member of the Audit CommitteeTolga Sönmez was born in Ankara in 1973. He entered the Department of Economics in Anadolu University’s Faculty of Economics and Administrative Sciences and graduated in 1996. Then he went to London and graduated from the Banking and Finance Certificate Program of London Guildhall University. Mr. Sönmez took a first step into his career when he started working for İhlas Holding A.Ş. as a Finance Officer in 1997. In 2002, he transferred to Ülker Group’s leasing company, FFK Fon Finansal Kiralama A.Ş. Tolga Sönmez resigned from his position as Finance Manager at this company in 2008 and continued his career as Finance Manager at Baklavacı Güllüoğlu A.Ş. until March 2011. He worked at Boer Electronics as Financial Affairs Coordinator later on. Tolga Sonmez still serves at Pelsan Aydinlatma as Finance Manager. He is married and has a daughter. In addition to attending to many seminars both at home and abroad, Mr. Sönmez has participated as a speaker in Finance Congresses organized by Middle East Technical University’s Finance Club.

Mustafa R. SELÇUK (4) Deputy Chairman of the Board of Directors, Chief Executive Officer and Executive Board MemberBorn in 1968, Mustafa Selçuk graduated from Istanbul Saint Joseph French High School for his middle and high school education. He entered the Faculty of Business Administration in Istanbul University in 1986 and graduated in 1990. Mustafa Selçuk was trained in financial management, risk management and financial modeling in the USA, Netherlands and Turkey. He started working for İhlas Group in 1993 at the Finance Department. Mr. Selçuk established the Loans and Fund Management Department and worked as a director until 2003. Mustafa Selçuk joined İhlas Media Holding in 2003 to establish the Finance Department and since then, he has been serving as İhlas Media Holding Finance Coordinator. In addition to his professional administration duties, Mustafa Selçuk writes articles three days a week for Türkiye Newspaper, he airs a radio show with a friend of his once a week at TGRT FM radio channel, and he has a television show on economics and current issues once a week at TGRT News TV. Mustafa Selçuk is married and has a son. He is a member of the Board of Trustees and the Chairman of the Supervisory Board of TESYEV (The Disabled Sports

54 61 2 3


Support And Education Foundation Turkey) , a congress member of Beşiktaş Gymnastics Club (BJK), a member of the Board of Trustees of SAJEV (Saint Joseph Educational Foundation) and a member of Saint Joseph Students Association.

Ahmet Mücahid ÖREN (5)Chairman of the Board of Directors A. Mücahid Ören was born on April 28, 1972, in Istanbul. He completed his university education in Economics at Anadolu University. Between 1989 and 1991, he worked as a Computer Coordinator for Türkiye Newspaper, while also serving as Chief Publishing Advisor for Türkiye Children’s Newspaper. He was directly in charge of Türkiye Newspaper’s transition to electronic publishing. Hence the paper became one of the first in Turkey to use an entirely electronic system. In 1991, he became General Manager of TGRT, Turkey’s first private radio and television channel. He was instrumental in setting up studios, upgrading technical equipment and establishing a new infrastructure for broadcasting. He was appointed General Manager and Deputy Chairman of the Board of Directors of İhlas Holding in 1993. He is a member of several Turkish and international foundations, associations, societies and other groups operating in various sectors and has numerous published articles. Mr. A. Mücahid Ören speaks fluent English.

Nuh ALBAYRAK (6)Member of the Board of Directors Nuh Albayrak was born in 1960 in Konya where he completed his primary and secondary education. He had a great interest in literature ever since, and proved this interest with many first places in high school essay contests. Mr. Albayrak wrote editorials in a local newspaper named Seydişehir Postası (Seydişehir Journal) for a year. Nuh Albayrak completed his university education in Istanbul at the Faculty of Engineering of İDMMA - Galatasaray Engineering graduating as a civil engineer in 1980. After completing a year as an engineer, he returned to his first love, journalism, and started working at Türkiye Newspaper as an “apprentice”. Since then, Mr. Albayrak has worked in all the units of the newspaper and after serving as Editorial Director for 12 years he undertook the responsibility of Chief Editor in May 2007. As one of the first people to display an example of the new “total responsibility” management format, Mr.

Albayrak has expressed that he continuously experiences the difference in doing journalism in an “engineering kind of way” in the media sector. He is married and has two children. Nuh Albayrak is a member of the Journalists Association of Turkey, TSYD (Sports Journalists Association of Turkey), and MÜSİAD (Independent Industrialists and Businessmen’s Association) in addition to carrying out his duties as Member of the Board of Directors of the Press Association and Vice President of the Media Ethics Council.

Fevzi KAHRAMAN (7)Member of the Board of DirectorsFevzi Kahraman was born in Uşak in 1948 and began his career right after completing his high school education. After completing his military duty in 1974, Mr. Kahraman started working in the finance corps. In 1981 he resigned from his position in the civil service and began working at Türkiye Newspaper. Over time, and within the structure of Türkiye Newspaper, he provided services as a reporter, as a department chief and as manager of the News Centre. Between 1983 and 1986, he served as General Editorial Coordinator to Ege (Aegean) Newspaper, a newspaper in İzmir with economic content. In the same years, he was also the Provincial Board Member of a political party. Between 1987 and 1990, he undertook the responsibilities of being Chairman of the Central District and a Member of Parliament in the İzmir Metropolitan Municipality. Fevzi Kahraman served as a member of the Board of Directors for Sivas Demir Çelik Sanayi A.Ş. (Iron and Steel Industries) in 1988 and 1989, followed by the Provincial Chairman position he undertook for the same political party in 1990 and 1991. Upon his return to Istanbul in 1991, he started working at Türkiye Newspaper as General Coordinator until 1994. In 1994, Mr. Kahraman started working in İhlas News Agency (İHA) as General Manager in addition to providing services as Editorial Consultant to Türkiye Newspaper until 1997. He was also engaged in television programming in 1996 and 1997. He began working in Türkiye Newspaper as Editor-in-Chief in 1999, followed by his position at İhlas Holding as Assistant General Manager Responsible for Media. He used to be the General Manager of İhlas News Agency between the years 2001 and 2012. Between 1996 and 1998, he participated in seminars as a speaker on Vocational Trainings for Local Journalism, TV Broadcasting and Radio Broadcasting organized by the Journalists Association of Turkey and the Konrad Adanauer Foundation. Having won awards for these accomplishments, in 2011 he was elected by the Journalists Association of Turkey as a member of the jury formed to select successful journalists in the categories of news, photography and video for the year 2010. With over 30 years of experience in the profession, Fevzi Kahraman is a member of both the Journalists Association of Turkey and I.P.I. (International Press Institute). He is also the proud owner of many awards presented by various profession related and non-governmental organizations.

Rıdvan BÜYÜKÇELİK (8)Member of the Board of DirectorsRıdvan Büyükçelik was born in 1960 in Edirne’s Keşan district. In 1978 he graduated from Keşan High School, followed by his acceptance to Istanbul University’s Faculty of Business Administration. After graduating from university in 1982, he started work at İhlas Holding’s Accounting Department. Since 1984, he has provided services at various İhlas Group companies in the departments of Fair Journal, Accounting, Imports,Construction and Finance. He remains a Member of the Board of Directors of TGRT Haber TV A.Ş., TGRT Dijital TV A.Ş., Promaş A.Ş and İhlas Media Holding.

Osman DUMAN (9)Member of the Board of Directors and Chairman of the Audit CommitteeBorn in 1970, Osman Duman graduated from Istanbul Atatürk Science High School in 1988. After graduating from the Department of Industrial Engineering in Istanbul Technical University in 1992, he began his career at İhlas Motor Import Department in 1993. Mr. Duman worked at İhlas Holding Finance Department from 1995 - 2000. His position as İhlas Net Finance Manager in 2000 - 2001, was followed by returning to İhlas Holding Finance Department between 2001 and 2005, and then he provided services for Ekstrem Güvenlik A.Ş. in 2005 - 2006. Osman Duman joined Han Construction in 2009 and since then, he has served as Purchasing Manager.

7 8 9

10

Nuh ALBAYRAK (1)Editor-in-Chief of Türkiye NewspaperNuh Albayrak was born in 1960 in Konya where he completed his primary and secondary education. He had a great interest in literature ever since, and proved this interest with many first places in high school essay contests. Mr. Albayrak wrote editorials in a local newspaper named Seydişehir Postası (Seydişehir Journal) for a year. Nuh Albayrak completed his university education in Istanbul at the Faculty of Engineering of İDMMA - Galatasaray, Engineering graduating as a civil engineer in 1980. After completing a year as an engineer, he returned to his first love, journalism, and started working at Türkiye Newspaper as an “apprentice”. Since then, Mr. Albayrak has worked in all the units of the newspaper and after serving as Editorial Director for 12 years he undertook the responsibility of Chief Editor in May 2007. As one of the first people to display an example of the new “total responsibility” management format, Mr. Albayrak has expressed that he continuously experiences the difference in doing journalism in an “engineering kind of way” in the media sector. He is married and has two children. Nuh Albayrak is a member of the Journalists Association of Turkey, TSYD (Sports Journalists Association of Turkey), and MÜSİAD (Independent Industrialists and Businessmen’s Association) in addition to carrying out his duties as Member of the Board of Directors of the Press Association and Vice President of the Media Ethics Council.

Thomas BONIFIELD (2)İhlas News Agency (İHA) General Manager * (as of 30.03.2012).Thomas BONIFIELD, who was born on June 13,1967 in Fort Knox City, Kentucky, United States of America, graduated from Arizona State University, Department of Journalism with an outstanding graduate award. Bonifield, who had done some academic studies at Leningrad State University, took up an editorial position in a local TV channel in Phoenix County in 1988. He began work as a producer in ABC NEWS in 1998, and also worked for an extended period at FOX NEWS and NBC NEWS as a news reporter and administrator. Bonifield worked as chief clerk in the Moscow branch of the NBC NEWS channel from 2000 - 2007. During this period, he worked in many Asian and Middle Eastern countries such as Iran, Afghanistan, Iraq and Israel as a journalist. He coordinated 12 overseas offices in 2007-2008, while he also used to work as Foreign News Editor in the New York desk of NBC NEWS. After starting work as the General Coordinator in İhlas News Agency (İHA) in August 2008, he was then appointed General Manager of İHA on February 21, 2012. Bonifield, who can speak Russian as fluently as his native language English, is married with 3 children.

Bülent AYANOĞLU (3)TGRT News General Manager and Editor in ChiefBülent Ayanoğlu was born in 1963 in Denizli, and graduated from Anadolu University, Faculty of Communication Sciences, Department of Journalism. Ayanoğlu, who started work as a news reporter in Türkiye Newspaper in

Subsidiary Management

1 2 3 4 5


1976, obtained one year of training in England in 1987. He took on the positions of News Reporter, Columnist, Intelligence Chief, Deputy News Editor, News Editor, Editor in Chief and General Coordinator, respectively in Türkiye Newspaper. He was appointed to the post of News Editor in the newly established TGRT TV in 1993. Ayanoğlu, who took television broadcasting training in England in 1995, worked as TGRT Assistant General Manager in 1996 and İhlas Net Assistant General Manager in 1997. He pioneered running account broadcasting in Turkey. He served as the Editor-in Chief at Türkiye Newspaper in 2007 before becoming Editor in Chief of TGRT News TV in 2011, and became the General Manager of TGRT News TV in June 2011. Currently, he serves as both General Manager and Editor in Chief of TGRT News TV. He is married with one child.

H. Ferruh IŞIK (4)General Manager of İhlas Gelişim (Magazine and Fair) GroupHüseyin Ferruh Işık was born in Istanbul in 1974. After graduating from Istanbul Fatih Private High School, he completed his college education at the Business Administration Faculty of Anadolu University. He started his first profession, journalism, in 1992, when he began working as editor of “Made in Turkey” newspaper. Afterwards he went through special training in Germany, in the fields of business administration and management, followed by his appointment as General Manager of İhlas Basım Tanıtım A.Ş. In 1996, Mr. Işık was appointed General Manager of İhlas Holding’s Magazine Group. During the strengthening process of İhlas Magazine Group’s institutional structure, the development of

publishing and communication systems, and the establishment of fast and modern printing systems, his efforts made major contributions to the publishing industry. He still serves in this last position. Meanwhile, he is also Chairman of the Board of Directors of İhlas Fuar Hizmetleri A.Ş. and a Member of the Board of Directors of İhlas Gelişim Yayıncılık A.Ş. Mr. Işık speaks fluent English and German, and he is a member of both the Journalists Association of Turkey and the Turkish - American Businessmen Association (TABA).

Necmi ÇİÇEKÇİ (5)General Manager of İhlas Medya Planlama ve Satınalma HizmetleriNecmi Çiçekçi, who was born in 1963 in Erzincan-Kemah, studied at Istanbul University Faculty of Law, Press and Public Relations in Anadolu University, and in the Faculty of Business Administration in Anadolu University. He has worked for Türkiye Newspaper, Günaydın Newspaper and Milliyet Newspaper during his journalist career, which started in 1979. After leaving Milliyet Newspaper, he founded his first advertising company, Üçboyut Advertising Agency in 1986. He subsequently served as the founding President of İhlas Basım Tanıtım (Printing and Advertising) and İhlas Advertising Agency. He served as a Member of the Board of Directors in Ihlas Barter after 1994. He played an important role in the foundation and development of Türkbarter in 2000. He founded Fikirevim Advertising Agency in 2001. Then he founded İhlas Media Agency in 2005. He still serves as the General Manager of Fikirevim Advertising Agency and İhlas Media Agency. Necmi Çiçek is married with two children, and speaks English fluently.

Serdar KAYAOĞLU (6)General Manager of Alternatif Medya Görsel İletişim Sis. Ltd. Şti.Serdar Kayaoğlu was born in Istanbul in 1959. He graduated from Fatih High School, Kuleli Military High School and the Air Force Academy, respectively. After graduating from the Computer Engineering Department of Middle East Technical University, Mr. Kayaoğlu served in the Air Force Command until 1990. Up to 1984, Mr. Kayaoğlu had served as a pilot, and afterwards he was assigned as an Information Technology Officer, in which capacity he completed various projects operating as a software engineer, a systems analyst and a project officer. After parting ways with the Air Force in 1990, Mr. Kayaoğlu began working at İhlas Group as Information Technology Coordinator. In 2001, Mr. Kayaoğlu resigned from his position in İhlas Finance Corporation as Assistant General Manager Responsible for Technology and founded his own company. Mr. Kayaoğlu resumed working with İhlas Group in 2005 when he started providing services as CIO. He is also a partner and General Manager of Alternatif Medya. Mr. Kayaoğlu is married, has two children and speaks fluent English.

Ömer DEMİR (7)General Manager of İhlas Net and İhlas Communication Services Demir, who was born in Istanbul in 1966, first graduated from Fatih Erkek Lisesi (High School) before studying Electricity and Electronics (2-year vocational high school) and completed his university education at Anadolu University, Faculty of Economics. He served as an administrator in Türkiye Newspaper Advertising and Graphics department until 1993. He then worked in England as administrator of the Advertising department of TGRT TV. After returning to Turkey, he worked in the TGRT Foreign News Department. He received a raft of awards for various news items and interviews and was an unreserved success as Foreign News Editor. Demir worked as Assistant General Manager in the first years of İhlas Net, and later on he also directed the Advertising, Marketing and Public Relations Departments. He supported many influencing campaigns such as Free Click, DizÜssü, NetTV etc. After being appointed to the position of İhlas Net General Manager during the 2001 economic crisis, he pioneered internet connections via satellite uplink in Turkey. Currently, Ömer Demir is the Chairman of the Board of Directors of İhlas Net, and the General Manager of İhlas Net, İhlas Communications and Net Communications. Demir speaks English fluently and is a member of various professional associations, including the Association of Journalists, the Press Council, and TÜTED (the Association of All Telecommunication Businessmen).

76

İHLAS MEDIA HOLDING AIMS TO

FACILITATE ITS SUBSIDIARIES IN IMPLEMENTING

THEIR INVESTMENTS

BY USING THEIR OWN

SHAREHOLDERS’ EQUITIES


Changes in technology enable existing content to be displayed on other platforms within the media industry, causing the formation of alternative media. It is expected that the development in the Internet is to increase the diversity of mediums. Although the essence of the work done in the media industry remains unchanged, the forms of methodology and presentation change rapidly as they keep pace with developing technology.

Rather than establishing their own printing plants, some newspapers in the industry prefer to subcontract their printing workload to the printing plants of other newspapers with higher capacities. On the other hand, some media organizations prefer to set up their own news agencies for the sake of establishing their own news networks and reducing unit costs. Thematic channels stand out in television broadcasting, whereas publishing magazines on the web is preferred to printed magazines

and similarly, virtual trade fairs are being organized.Although the development and spread of the Internet’s structure affects printing jobs in the written press, this fluctuation maintains its balance due to the economic development of the country, causing greater need for printed material in different aspects. This, thus, brings about balance. Developing technology can reduce printing costs. Development in the communication sector enhances these needs of society in addition to stepping up the necessity of providing content to meet those needs. Meanwhile, greater purchasing power affects sales prices in a positive way.

The primary policy in strengthening İhlas Media Holding’s performance is to make investments for subsidiaries with the net cash resulting from the production of operation profits. In other words, by using their own resources.

Activities in 2011

14

Türkiye Newspaper (www.turkiyegazetesi.com.tr) was established on April 22, 1970. Since its establishment, the newspaper’s ownership and publishing policy have remained unchanged. Türkiye Newspaper is a newspaper committed to the principle of transmitting accurate and real news, uncompromisingly dedicated to press ethics and principles and faithful to universal and contemporary values.

Türkiye Newspaper is a media organ that has high competitive strength, and has an experienced management perception, consistent publishing principles, brand awareness and wide readership.

In addition to its content, Türkiye Newspaper has a powerful technical and logistics infrastructure. The Newspaper boasts printing facilities in Istanbul, Ankara, Izmir, Adana, Trabzon and Antalya. The capacity of the Istanbul facility alone is 55 thousand newspapers an hour. The individual printing offices in Ankara, İzmir, Adana, Trabzon and Antalya also produce pages supported by local news to report on regional current affairs.

İhlas Gazetecilik / İhlas Journalism(Türkiye Gazetesi / Türkiye Newspaper)

İhlas Media Holding Subsidiaries


Circulation Table of Türkiye Newspaper in 2011 and 2010

2011 Daily 2011 Total 2010 TotalMonths Circulation Circulation Circulation January 134,002 4,154,070 4,465,950February 139,027 3,891,393 3,946,896March 142,666 4,422,651 4,357,243April 143,857 4,315,796 4,208,827May 145,428 4,508,260 4,262,010June 146,467 4,394,003 4,257,821July 143,241 4,440,474 4,324,698August 137,273 4,255,458 4,155,599September 135,917 4,077,509 3,808,643October 136,129 4,219,994 4,053,636November 132,432 3,972,963 3,930,213December 133,854 4,149,459 4,084,966

As well as being sold at newsagents, Türkiye Newspaper is distributed directly to homes and offices by the retailers of Ihlas Marketing, one of the Ihlas Group companies. Türkiye Newspaper was the first newspaper in Turkey to implement such a system.

The manual delivery system, which is used commonly and especially in the USA and Japan, brings about good sales stability, in addition to establishing sound communication with readers. The manual delivery network also provides a strong customer base to İhlas Group’s marketing operations.

With the trust obtained from merits such as being transparent, reliable and valuable, Türkiye Newspaper has provided its readers with the opportunity to be partners in a newspaper they have known and heard of for 40 years. For 40 years, Türkiye Newspaper has been continuing its business life with the same ownership structure and is a newspaper that is diversified with high future potential due to its pages, brand, stable principles of broadcasting and loyal reader base. İhlas Gazetecilik (İhlas Press), continues operations with printing plants located in six cities.The shares of İhlas Journalism started trading on June 14, 2010 on the ISE with the code, IHGZT ISIN.

At the end of 2011, İhlas Holding and İhlas Media Holding’s stakes in İhlas Gazetecilik stood at 6.92% and 56.55%, respectively.

TÜRKİYE NEWSPAPER IS A MEDIA ORGAN THAT HAS HIGH COMPETITIVE STRENGTH, AND HAS AN EXPERIENCED MANAGEMENT PERCEPTION, CONSISTENT PUBLISHING PRINCIPLES, BRAND AWARENESS AND WIDE READERSHIP

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A first in the Turkish press, “Yeşil Sayfa” (the Green Page) was published to fulfill our social responsibility regarding preservation of the environment and nature. It won the “Environment Award” from the Ministry of Environment and Forestry on World Environment Day.

Starting in 2008 and continuing in 2009, editorial and layout innovations were made in conformity with new content and new appearance. In 2010, the page layout and design of the newspaper were completely prepared anew. Türkiye Newspaper is determined to continue adapting and changing, with the motto of “a new concept of journalism”, while making use of the possibilities and technology offered by the information age. The newspaper has managed to make significant changes in its design and content while preserving its professional traditions and principles. “Special Pages” have become extremely important for advertisers and this innovation has turned out to be one of the most successful aspects of this change and transformation.

In an era where news channels include live broadcasts on a per-minute basis and Internet journalism is threatening the newspaper pages, Türkiye Newspaper has displayed a “Different Kind of Journalism”. Instead of competing with “shallow information”, Türkiye Newspaper prefers to announce information of “depth” and “quality” through “experts” in the related subjects.

“Special Pages” have formed “a new style” in the Turkish press and has developed in a very short time while successfully fulfilling its mission of serving its purpose.

2011 Daily Printing Amounts

Printing Printing Amount Amount Printing of Türkiye of Other PrintingFacility Newspaper Newspapers CapacityIstanbul 67,126 1,171,436 1,351,600Ankara 32,965 67,835 284,000Izmir 26,192 31,808 284,000Adana 19,392 43,688 240,000Antalya 6,850 10,590 150,000Trabzon 18,083 16,580 150,000

Total 170,608 1,341,937 2,459,600

TÜRKİYE NEWSPAPER WAS GRANTED THE “ENVIRONMENT PATENT” BY THE MINISTRY OF ENVIRONMENT AND FORESTRY FOR “GREEN PAGE” (YEŞIL SAYFA), WHICH WAS INTRODUCED FOR THE FIRST TIME IN THE TURKISH MEDIA. “THE UNOBSTRUCTED PAGE” AND “THE GREEN PAGE” ARE TWO PRODUCTS OF TÜRKİYE NEWSPAPER’S SOCIAL RESPONSIBILITY UNDERSTANDING


Ediz Hun’la Yeşil Sayfa® / Green Page with Ediz Hun®

Initially, Türkiye Newspaper brought the environmental problem to the table as it has become an issue that affects our lives directly. Together with the experienced environmental scholar, Ediz Hun, the newspaper introduced “the Green Page” to Turkey. The great interest generated by this page resulted in the newspaper being presented with an “Environment Award” and was perceived as a signal indicating how appropriate and timely this new structuring was. “Yeşil Sayfa” is a trademark of the newspaper, registered with the Turkish Patent Institute.

Engelliler İçin “Engelsiz Sayfa”® / “No-Handicap Page” for the Handicapped®

10% of our population is handicapped and in an attempt to do something for them Türkiye Newspaper cooperated with TESYEV, the most experienced and reputable institution that focuses on the handicapped. Together they have commenced publishing the “No-Handicap Page”, the first and still the only newspaper page in Turkey designed for the handicapped. “Engelsiz Sayfa” is also a trademark of the newspaper, registered with the Turkish Patent Institute.

Ailenizin Doktoru® / Your Family Doctor®

Another trademark of the newspaper that is registered with the Turkish Patent Institute is “Ailenizin Doktoru”. On this page, in addition to regular warnings according to the season and developments, Dr. Hilmi Özkırış provides personal recommendations to readers in need, as well as forwarding them to the right contacts.

Sevimli Lezzetler / Lovely Tastes

The famous cuisine specialist Sevim Gökyıldız promotes the culture of Turkish cuisine all around the world, especially in Paris. Each week, she guides food enthusiasts to new flavors on the Lovely Tastes Page.

Türkiye Gençlik Gençlik / Türkiye Youth

Türkiye Gençlik is prepared by young communication students, as they are the journalists of the future. The page is especially recommended by university teachers to their students as a vocational education tool. Each week, a different faculty of communication prepares this page and due to its content and

preparation format, Türkiye Gençlik is the only page of its kind in Turkey.

Kurşun Kalem / Pencil

“Kurşun Kalem” focuses on secondary school students as its target audience and is presented to the world of education as the product of a rigorous study conducted by a team of experts in their particular fields.

Diplomatik Muhakeme / Diplomatic Reasoning

Prof. Dr. Çağrı Erhan makes an analysis of global political and diplomatic developments and holds his findings up to reason, especially in relation to Turkey.

Çalışanın Dünyası / Employee’s World

In the Employee’s World page, Lütfi Köksal and Şerif Akcan produce tailor made solutions and provide private consultancy to everyone in the business world, be they employee or employer, within the framework of data given and questions asked.

Kadın ve Aile Sayfası / Women and Family Page

Female readers in particular have benefited from the “Women and Family Page” at every stage of their lives due to its broad spectrum varying from emergency home remedies to practical advice on quick careers.

Pazar Sohbetleri / Sunday Chats

Sunday Chats, with different celebrity guests by Betül Alt›nbaflak and Gurbet Kalay Zorba, have taken the lead over their counterparts in other newspapers.

İz Bırakanlar / Those Who Made a Mark

With his exquisite style, İrfan Özfatura writes “İz Bırakanlar”, a specialty of Türkiye Newspaper that “points an x-ray” at the lives of people who have left a mark on Turkey and on the world with their personalities and their actions.

IHA EARNED ITS PLACE AMONG THE WORLD’S PRESTIGIOUS

NEWS AGENCIES, THANKS TO

ITS NEWS PRODUCTION ON

5 CONTINENTS, AND TO ITS SATELLITE

OPERATIONS


İhlas News Agency (İHA), the first news agency in Turkey to broadcast video news, was founded in 1993. İHA, which has always adopted accurate, fast and objective journalism as a principle, and has consistently maintained organizational and technological investments since the day it was established, is currently regarded as a successful and reputable news agency in Turkey by independent authorities.

IHA produces a daily average of 160 video news items and 850 printed and photo-news items with over 800 personnel working in cooperation in 140 domestic and international offices. İHA is a respectable Turkish news agency with 1500 subscribers in 2011, consisting of a number of newspapers, web sites, magazines and institutions, together with more than 100 television channels in Turkey

and in various other countries. Besides being capable of transmitting video, images or news from almost every town and city in Turkey, in addition to 35 countries around the world, İHA transmits news to subscribers via satellite uplink and the internet. In addition to 250 national and global footage transmission stations, İHA has 32 uplink stations abroad so that it can instantaneously transmit video via satellite to the whole world, by rapidly arriving at the sources of events.

İHA started opening foreign offices in 1996, and has since earned its place among the world’s prestigious news agencies, thanks to its news production on 5 continents, and to its satellite operations. In parallel with the improvement in its technological infrastructure, İHA has enhanced its diversity of service. It started providing

İhlas Haber Ajansı (İHA) / İhlas News Agency

20

news in Arabic and English in 1998. With changing global paradigms following the September 11 attacks, İHA has concentrated its activities in Iran, Iraq, Afghanistan, Pakistan, Russia, Greece, Kosovo, Israel, Palestine and the Central Asian Turkic Republics. Widening its operational field in recent years, İHA has established offices in Washington, Cairo, Khartoum, Berlin, London, Athens, Bangkok and Islamabad, blazoning them with fully organized studios and uplink equipment, and has started to provide more effective and efficient news and broadcasting services all over the world.

Transmitting news to many international media channels on the War in Iraq in 2003, the tsunami disaster in Indonesia, and explosions in London and Egypt in 2005, İHA also showed live coverage during the Lebanon War in 2006, with broadcasts from Lebanon, Syria and Israel, three fronts of the war, as well as successfully broadcasting news on the uprising in Georgia in August 2008. In addition, the agency connected Khartoum to different parts of the world via a teleconference organized on behalf of the President of Sudan, and organized live press conferences in 8 countries on 4 continents. Again, during the terrorist attacks in Mumbai in 2008 and the Gaza War in 2009, İHA maintained its performance and became one of the very few organizations to broadcast from both inside Gaza, and from the Israeli and Egyptian sides of the border. İHA sent 6 uplinks and a team of 30 people to the 2010 World Cup in South Africa, and provided transition and live broadcasting services to over 300 Turkish and international TV channels during the event. Again in 2010, İHA followed the 2010 general elections in Sudan with five different live broadcast teams.

The system of digitally archiving footage was launched with original software developed by İHA’s own technical team long before the emergence of similar examples elsewhere in the world. More than 570,000 images have been

indexed under this system. Likewise, a total of 2,750,000 news texts and 3,295,000 photographs belong to the last fifteen years are digitally stored and indexed. One of our main projects for 2012 is the development of software to enable access to these digitally archived treasures and make them available for users. The news automation system, the software of which will be developed by İHA, will be put into use to enable direct entry of news into the system from any location with internet access. This innovation will exponentially expand the current news reporter and copy editor network and enable faster transmission of the news to the client.

During 2011, İHA renewed its existing machine park by leasing to a value of $ 1,260,000 in order to purchase cameras, uplinks, live broadcasting vehicles, servers and personal computers. The high capacity memory units were put into use, a server virtualization technology was launched and a more productive, flexible and economic information technology structure, called cloud architecture, was established within this frame. The automation software used for the management of operational activities at home and abroad was changed for new, more functional software. In addition, a CRM software program, developed from scratch by İHA, was activated so that the subscriber management system used by the marketing department could meet current requirements faster and more efficiently. Also in 2011, four live broadcasting vehicles operating across Turkey, some of them with HD broadcasting compatibility and full backup, were completely refurbished. A live broadcasting vehicle was sent to and stationed in both Bursa and Trabzon, in addition to the current ones in Ankara, Antalya and Diyarbakır.

THE REVOLUTIONS, DUBBED AS THE ARAB SPRING WHICH STARTED IN 2011, BOOSTED İHA’S BUSINESS VOLUME AND EFFICIENCY, WITH ITS NEWS NETWORK IN THE REGION


In addition to the normal satellite broadcasting activities of the Operations Department, the IES system project (live broadcast over the internet) was completed and implemented in complete accordance with client demand in 2011. It will be possible to watch any event over the internet via computers or mobile handheld devices (IOS and Android), without the need for a satellite dish.

The social and economic events that took place during 2011 created new and significant business opportunities for the Agency. A considerable broadcasting service was provided to many countries, especially with the Arab Spring which started in Tunisia, and then spread to many Middle Eastern and North African countries. İHA supplied transmission and live broadcast services to television news reporters by means of studios and uplinks, each with multiple outputs, from the region including countries such as Tunisia, Egypt and Libya. At the outset of the rebellions in Libya, a major broadcasting service was implemented in the warzone by becoming operational first in Benghazi and then in Tripoli.

Furthermore, technical services were provided to television channels in many European capital cities, to cover the economic crisis suffered by a number of European countries. As a result of the major focus on Greece due to its excessive debt load, a studio with uplink facility was opened and rapidly activated in Athens. News about the economic crisis in Athens was broadcast, along with strikes and demonstrations. In addition to this, the German cities of Frankfurt, hosting the European Central Bank Headquarters, and Berlin were two significant locations attracting the attention of television channels. İHA provided technical services to its clients through its live broadcast vehicles and studios in these cities. Meanwhile, Afghanistan and Pakistan became more vital for the Agency due to developments in Asia. The studio in Afghanistan was refurbished and the studio in İslamabad was made operational with an uplink.

In January 2012, İhlas Yayın Holding (İhlas Media Holding) raised its participation stake in İHA from 50% to 75%.

İHA was granted the “Best Video Award” by “Turkey’s News Cameramen Association”, in addition to several awards given by the Izmir Journalists Association, various Non-governmental Organizations and Local Administrations in 2011.

The Agency plans to expand the number of countries in which it operates, and to adopt new technologies in every field in line with demand in 2012.

Thanks to its superior capabilities such as rapid access to international news, capacity of live footage and the number of technical facilities in foreign countries, İHA has worldwide coverage. Plans are underway to initiate HD (High Definition) video service to local and international subscribers and clients, and to provide HD broadcast and transmission services during 2012. At the same time, the Company is going to make a revised investment of approximately $ 1,500,000, and plans to purchase 13 shoulder cameras and 27 semi-professional handy-cams in the first phase, and then continue with six live broadcasting vehicles and two flyaway uplink systems.

TGRT NEWS, ENLIVENING POWERFUL

JOURNALISM WITH LIVE BROADCASTS

ON LOCATION, HAS ALSO ENRICHED

ITS CONTENT BY FEATURING

PROGRAMS WITH EXPERTS. TGRT NEWS WILL NOT

ONLY COMPLETE ITS HD INVESTMENTS

IN 2012, BUT ALSO ENHANCE VISUAL

QUALITY


Having amassed experience in bringing together the news on national and international current affairs through Türkiye Newspaper (İhlas Journalism A.Ş.) and İhlas News Agency (İhlas News A.Ş.), the İhlas Group transferred this amalgamation to TGRT News when it went on air on October 29, 2004.

TGRT News has earned the acclaim and trust of viewers adopting a stable broadcasting concept that addresses expectations, takes responsibility and does not compromise on its objectivity. Operating with the principle, “TGRT News only features news”, the channel has stayed true to its identity as an objective, genuine and honest news carrier.

Since August 2007, TGRT News has been broadcasting its programs in Europe via the Turksat West satellite and has emerged as a new source of information for Turks living in Europe.

TGRT News TV presents news from both Turkey and the world through 24-hour live news bulletins. Both at home and abroad, the news channel transmits the opinions of guests who are experts in agenda related topics to viewers through live broadcasts.

In addition to successful journalism, TGRT News also features television shows in which current topics are debated by experts in the related topics as of the beginning of 2011. In 2012, TGRT News aims to make investments in renewing and up-dating most of its equipment and broadcasting in HD quality.

The participation share of İhlas Yayın Holding (İhlas Media Holding) in TGRT Haber (TGRT News) stands at 98.96%.

TGRT Haber TV / TGRT News TV

TGRT FM HAS A

DISTINCTIVE, DISCIPLINED,

AND RESPECTED PLACE IN RADIO BROADCASTING


TGRT FM has worked as part of TGRT News with a policy of superior broadcasting quality since October 4, 1993. TGRT FM, presenting quality programs with a professional concept of broadcasting to its listeners, uses up-to-date technologies and program broadcasting.

TGRT FM has one broadcasting, two recording and two editing studios, all equipped with professional apparatus. The wide spectrum of contests, children’s shows, cultural, artistic, women’s programs, sport, chat and magazine programs, and audio plays set the radio station apart from others.

With its great prestige in the hearts of the Turkish nation, with its news programs, various productions and classical radio plays, TGRT FM produces acclaimed and admired radio broadcasts. TGRT FM has a distinctive, disciplined, and respected place in radio broadcasting.

TGRT FM can be received on radio via 120 transmitters throughout Turkey. It can be received via digital satellite transmitters anywhere within Turksat 2A Satellite coverage and has been streamed over the internet worldwide since 1998.

You can find updated information about radio frequency and satellite frequency on www.tgrt-fm.com.tr.

TGRT FM / TGRT FM Radio

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TGRT Digital TV changed its former name TGRT Pazarlama (TGRT Marketing) to TGRT Belgesel (TGRT Documentary) on April 22nd, 2010 and has been broadcasting under this name since then.

The contents of TGRT Documentary consist of documentaries dealing with history, civilization, culture, art, nature and spiritual values. The channel broadcasts continuously for 24 hours a day with its educational, relaxing and informative broadcasting policy. The most noteworthy feature of the channel, setting it apart from other documentary channels, is that there are no charges or satellite subscription systems required in order to view the channel.

New productions planned for 2012 include “Life of the Turkish Sultans”, “Pioneers of Science” - a production to show the life stories of scientists that have made major contributions to the science world-, supplying foreign sourced new nature and animal documentaries as well as new high quality documentaries produced by professional teams on showing the natural and cultural treasures of Turkey. Moreover, TGRT Documentary’s web page is under construction and when it is complete, viewers will be able to watch the broadcast over the Internet.

TGRT Dijital TV Hizmetleri / TGRT Documentary TV

THE CONTENTS OF TGRT DOCUMENTARY CONSIST OF DOCUMENTARIES DEALING WITH HISTORY, CIVILIZATION, CULTURE, ART, NATURE AND SPIRITUAL VALUES


İhlas Gelişim Yayıncılık A.Ş. is an umbrella company that gathers all of the İhlas Group’s magazine and fair organization companies. This umbrella company conducts these activities through İletişim Magazin A.Ş. (Communications Magazine) and İhlas Fuar Hizmetleri A.Ş. (Fair Services). İhlas Magazine Group, one of Turkey’s largest sectoral magazine groups, was established in December 2007 under the title “İhlas Gelişim Yayıncılık A.Ş.”. İhlas Yayın Holding owns 84% of this parent company.

İhlas Magazine Group enjoys a strong reputation thanks to its sector magazines, inserts, catalogues, official fair brochures and overseas specific projects. İhlas Magazine Group enjoys a prominent place in the sector, regularly and continuously offering business development projects to the Turkish economy.

İhlas Magazine Group (www.img.com.tr) published its first magazine in 1981. With its sector magazines and international publishing activities in particular, it is Turkey’s largest magazine group. The magazine group’s client base consists of SMEs, which also form the client base of Türkiye Newspaper. In 2011, new magazine named Sleep Well began distribution, raising the total number of magazines to 24.

Companies of İhlas Fair Services and İhlas Magazine Group have been operating in the service of many different sectors. The Company’s client-focused structure and ability to produce new ideas generated great success in satisfying customer needs and provided a real business developing environment in its fairs.

İhlas Gelişim Yayıncılık / İhlas Publishing Development

İHLAS MAGAZINE GROUP ENJOYS

A STRONG REPUTATION THANKS TO ITS SECTOR MAGAZINES,

INSERTS, CATALOGUES, OFFICIAL FAIR BROCHURES

AND OVERSEAS SPECIFIC

PROJECTS


Communication Magazine (İletişim Magazin) operating under the umbrella of İhlas Gelişim Yayıncılık, whose main fields of activity are to issue, print, distribute and market newspapers, magazines, books and encyclopedias, publishes the below listed magazines and newspapers: A- CHILDREN’S MAGAZINES (3 publications) 1- Türkiye Çocuk Dergisi (Children’s Magazine Turkey): The magazine is İhlas Holding’s first publication after Türkiye Newspaper and has been in circulation since November 1981. The magazine was initially published on a weekly basis. However, since the year 2000, it has been published monthly and has a circulation of 17 thousand.

Hand delivered to 9,500 subscribers by the Regional Representatives of İhlas Marketing and marketed by 5 thousand Yay-Sat dealers and sent to 500 subscribers by mail and cargo,the magazine addresses children aged between 7 and 14.

2- Toyuncak Dergisi (Toyuncak Magazine): Published once every two months, the magazine is designed for the toys and teaching tools sectors. 90% of Toyuncak magazine is distributed domestically and it is one of three magazines in its related sector. The magazine’s distribution is secured by participating in international fairs in addition

to sending issues to manufacturers, wholesalers, importers, markets, schools, nursery schools and kindergartens. The magazine has a bi-monthly circulation of 5 thousand.

3- Baby Store Dergisi (Baby Store Magazine): An inter-industry magazine for companies, which addresses the needs of mothers and infants. The magazine has been in circulation since 2010. Published once every two months, the magazine has a circulation of 5 thousand.

B- TEXTILE AND INTERIOR DECORATION MAGAZINES (7 publications)4- Tekstil & Teknik Dergisi (Textile & Tech Magazine): The magazine has been published since 1985 in Turkish / English format and has a monthly circulation of 5 thousand. Domestic receivers of the magazine include companies with a manufacturing scope of textile machinery and technologies, related universities, associations and societies; whereas the international audience is made up of manufacturers of textile machinery and technologies.

5- Konfeksiyon Teknik Dergisi (Ready-to-Wear / Apparel Tech Magazine): The magazine has been published since 1995 in Turkish / English format. The contents of the magazine include articles, comments and

İletişim Magazin Gazetecilik / Communication Magazine Journalism

30

news related to the Ready-to-wear and apparel sector. The distribution scope of the magazine also consists of organizations related to these sectors.

6- Home Textile Exports Dergisi (Home Textile Exports Magazine): The magazine has been published in English on a monthly basis since 1997. Nine thousand copies of the magazine are printed monthly. Domestic magazine receivers are the exporters of the sector, in addition to importers abroad. The magazine’s distribution is carried out through participation with booths in all of the major fairs around the world. Some of these are in China, the USA, the UAE, Brazil, Belgium, Italy, Kazakhstan, Russia, Iran, Germany and the Ukraine.

7- Contract Textile International Dergisi (Contract Textile International Magazine): The magazine was first brought out in January 2010. The scope of the magazine is limited to fireproof and technically enhanced “contract textile”, a term used for textiles employed outside the home. The magazine is published three times a year for the most important fairs in the world relevant to its scope, namely Hemitextil - Frankfurt (January), Evteks - Istanbul (May) and Mood - Brussels (September). The magazine receives a great deal of interest both from within the country and abroad. An agreement of strategic cooperation was signed with UTIB (Uludağ Textile Exporters’ Association). According to the agreement, the magazine undertakes the promotion of the association in exchange for services such as consultancy, research and articles regarding the textile industry.

8- Home Textile Sourcing Dergisi (Home Textile Sourcing Magazine): The magazine is the only one of its kind in Turkey in the home textiles sub sector and has been published once every two months since January 2010. The magazine is distributed domestically and internationally and its main subjects include curtain accessories and curtain rails in addition to packaging materials, machinery, equipment and other related items used by the home textile sector.

9- Décor Dergisi (Décor Magazine): From January 2006, the magazine was published monthly under the name “Furniture Exports”. However, its name was changed to “Décor” on March 1, 2008. Since then, the magazine has continued its publications in the fields of interior decoration, focusing mainly on furniture, carpets and lighting in addition to 90% content about carpeting.

10- Sleep Well Magazine: The magazine about bedding, published once every two months since May 2011, is unique in the Turkish bedding sector. In fact there is only one in Turkey and one in two in the world. The magazine has a circulation of 9,000, and these copies are issued to bed manufacturers, importers, exporters and raw material suppliers. The magazine, which has become one of the Group’s most effective publications since its very first issue, is on a steep upward trend.

C- CUISINE AND WOMEN MAGAZINES (2 publications)11- Yemek Zevki Dergisi (Food Pleasure Magazine): After commencing circulation in 1997, the magazine paused publication due to the economic crisis in 2000. It

recommenced publishing in 2002 and became one of the most influential magazines of the recipe and cuisine sector.12- Beauty Turkey Dergisi (Beauty Turkey Magazine): The magazine began circulation in 2009 and focuses on personal care products and the beauty sector. Published once every two months, the magazine is domestically distributed to the related sector in addition to product buyers, manufacturers and importers, and internationally delivered to importers by mailing system and hand delivered at fairs.

D- AUTOMOTIVE MAGAZINES (1 publication)13- Automotive Exports Dergisi (Automotive Exports Magazine): The magazine has been published monthly in English since 1997. The main content and distribution scope of the magazine includes automotive sub sector products. There are approximately 50 magazines in the sector. Automotive Exports Magazine’s international distribution is secured through exact point delivery via mailing system and by participating in the industry’s leading international fairs. Some of these are in the United Kingdom, Germany, France, Russia, the Ukraine, Kazakhstan, Iran, Algeria, the Czech Republic, Romania, Poland and the UAE. E- INFORMATICS MAGAZINES (1 publication)14- IT Network Magazine (IT Network Dergisi): The magazine began circulation in 2009, and since then it has been providing communication between companies with its publications once every 15 days. There are 3 magazines in the related sector. F- CONSTRUCTION MAGAZINES (4 publications)15- Construction Materials Magazine (Yapı Malzeme Dergisi): The magazine, published monthly since 1995, is a deep-rooted and effective magazine in the Turkish construction sector. The magazine participates in major fairs of the sector abroad, and 10% of the printed copies are internationally delivered by mail, although the content of the magazine is mostly focused on the domestic market.

16- Hardware Tech Magazine (Nalbur Teknik Dergisi): The magazine is one of the most effective publications in the Turkish hardware and ironmongery sector. It has been in circulation every month since 2004, and is an important means of communication among the suppliers and the buyers of the sector.

17- Pipe and Technologies Magazine (Boru ve Teknolojileri Dergisi): The magazine, published on a monthly basis since 2006, introduces pipe products and systems used in various industries, and discusses innovations and the future trends of the sector.

18- Solar Energy and Technologies Magazine (Güneş Enerjisi veTeknolojileri Dergisi): Solar Energy and Technologies Magazine aims to offer brand new insights to energy sector, based on the fact that energy is a significant indicator of quality of life, as a requirement of social and economic development in today’s world. It serves the whole sector in order to boost our energy potential and utilize our country’s rich solar energy resources. The Solar Energy and Technologies Magazine has a wide readership with a circulation of 8,000, and is published once every two months in both, Turkish and English.


G- HEALTH MAGAZINES (1 publication)19- Medical Tech Magazine (Medikal Teknik Dergisi): The magazine has been in circulation every month since 1995, and is one of the most deep-rooted magazines in the Pharmaceutical sector.

H- DIGITAL PRINTING, PRINTING PRESS, PAPER AND OFFICE SYSTEMS (3 publications)20- Digital Tech Magazine (Dijital Teknik Dergisi): It has been published on a monthly basis since 2004, and is the only magazine in the digital printing sector. The magazine, feeling the pulse of the sector, is one of the Group’s effective publications.

21- Printing & Publishing Magazine (Matbaa Teknik Dergisi): The magazine, which has been in monthly circulation since 1995, is an effective publication in the printing press - paper sector. The sector follows developments, new trends and technologies through this magazine.

22- Partner Magazine (Partner Dergisi): The magazine is published once every two months and its content focuses on subjects such as office supplies, copying and digital printing. Office Partner Magazine is distributed to related organizations, municipalities, markets, schools and nursery schools.

I- TOURISM ENTERTAINMENT AND ACCOMMODATION MAGAZINES (1 publication)23- Hi-Tech Magazine (Hi-Tech Dergisi): Hi-Tech Magazine is a sectoral publication focusing on the needs of organizations such as hotels, motels and restaurants. 6,500 copies of High Tech Magazine are published monthly.

J- ECONOMY PUBLICATIONS (1 publication)24- Made in Turkey Newspaper (Made in Turkey Gazetesi): A monthly economics newspaper published in English since May 1982. It is the first Turkish exports newspaper to be distributed abroad. It is still the only publication in its field. The international recipients of the newspaper in 107 countries include importing companies, all of Turkey’s representative offices around the world, main chambers of commerce and industry and international economic organizations. Domestic recipients of the newspaper include exporting companies, banks and holding companies, government and bureaucracy societies, chambers of commerce and industry and all of the foreign representative offices in Turkey. Moreover, the newspaper is hand delivered by its own team at all the international fairs abroad in which Turkey has a national representation. Monthly circulation varies between 5 thousand and 10 thousand.

With the domestic information technology magazine “IT Network”, Communication Magazine for the year 2011 included by putting up a stand at the world’s largest fair on informatics, CeBIT in Hannover, and boosted the number of international fairs attended annually.

The 2012 targets of İletişim Magazin can be summarized as follows; to publish a magazine called Eurofil, boost the international circulation of the current magazines, raise advertising sales for the electronic magazines, and to organize the traditional show and awards ceremony “Printing Press Sector Charts”, which is organized by the Printing & Publishing Magazine every year in Istanbul, and during the Drupa Fair, which takes place once every four years in Dusseldorf, Germany.

32

Along with its success in publishing, about 100 professional events in fairs, international congress events, sectoral summit programs, and about 30 websites and internet portals, İhlas Fair Services remains at the heart of the economic world, and guides customers with its innovative and solution-based structure.

The Company was established in Istanbul in 1993 with the name, “İhlas Fuar Hizmetleri Ticaret A.Ş.”. In 1996, the company’s title was amended to “İhlas Fuar Hizmetleri A.Ş.”. The Company’s main areas of activity include organizing trade purposed and promotional fairs both domestically and abroad. The first event organized by the company was the Textile Machinery Exhibition (Tex - Con) in 1988.

İhlas Fair Services (İhlas Fuarcılık), which organizes special fairs on a sectoral basis, has become a major brand in solar energy and pipe fairs. İhlas Fair Services organizes domestic and international tourism events, summits, etc., and is planning to introduce new fairs in new sectors.

The company holds an ISO 9001 Quality and TS Service Compliance Certificate. Having organized almost 100 fairs since its inception, İhlas Fair Services aims to present innovations to the Turkish economic world, and has set up new developments at the fairs it hosts. The Company led the way in making up for information and commercial deficits of the public regarding solar energy, by organizing a fair on the subject, which was very enthusiastically received.

Moreover, in addition to fair events, İhlas Fair Services focuses on international conference and summit events. İhlas Fair Services also organized the printing sector oriented event “Printing Summit 2010”, at which the company brought the giants of the sector together and rewarded them for their successes.

İhlas Fair Services transferred all the magazines contained within its structure to Communication Magazine (İletişim Magazin Gazetecilik A.Ş.), another İhlas Media Holding company whose main field of activity is publishing, in order to speed up its facilities in fair services as of November 1, 2011. New fairs are being planned in new sectors during 2012, and markets and convenient dates for exhibition centers are being investigated for this purpose.

Fairs organized by İhlas Fair Services in recent years are as follows:

• Pipe and Spare Parts Fair• Istanbul Paint Fair• Insulation Equipment Fair• Greater Anatolia Printing and Paper Technologies Fair• Istanbul Molds Fair• Solar Energy and Technologies Fair

Fairs Organized in 2011 Pipe and Spare Parts Fair: The 7th Pipe and Spare Parts Fair took place in two halls at the Istanbul Expo Centre on March 3- 6, 2011. The International Trade Fair for Pipe and Fittings is the first and only fair specialized in its related subject. The fair had 156 participants, 91 local and 65 international, and 7958 local and 1128 international visitors.

Solar Energy and Technologies Fair: The 4th Solar Energy and Technologies Fair took place in two halls at the Istanbul World Trade Centre fairground at the Istanbul Exhibition Center on March 10 - 13, 2011. 223 companies, consisting of 162 domestic and 61 international firms, participated in the fair, which was visited by 22,213 people, consisting of 20,320 Turkish citizens and 1,893 foreigners. Some of the major product groups exhibited in the fair were solar energy photoelectric products, solar energy

İhlas Fuar Hizmetleri / İhlas Fair Services


and structural integration products and applications, solar energy thermal protection materials, solar energy new materials and technologies, solar energy photovoltaic product and production equipment, solar energy charged products and equipment.

İhlas Publishing Development has 92% shares in as of the end of the year 2011.

Alternatif Medya Görsel İletişim Sistemleri / Alternative Media Visual Communication SystemsWith its experienced staff in broadcasting technologies, Alternatif Medya serves its clients by targeting all kinds of digital broadcasting in addition to the normal perception of broadcasting, under the brand “Alternatif Medya”, with the experience of the “Digiplat” brand which supports digital signage technology.

It provides every kind of technical and content support so that companies can reach their target audience. Moreover, with its staff of expert developers, Alternatif Medya provides the facility to establish corporate television channels by developing broadcasting automation technologies and “digital signage” supported solutions.

All the companies’ broadcasting and production needs are fulfilled with the use of interactive services and solutions like IPTV systems, web broadcasting, corporate TV broadcasting, broadcasting e-catalogue system through information screens, Video On Demand (VOD) system, IPhone & Android applications and web portals.

Alternatif Medya, implementers of the VOD project in order to contribute to education by locating itself in the education sector, has broken new ground in many fields thanks to its digital library system. The VOD project enables organizations to digitally archive, protect and use data such as DVD, VCD, recorded films, music and sound.

It activated the Triple Play application, using the advantage of the Alternatif Medya brand, in order to support clients fully and spread the system as far and wide as possible. The Digital Signage, Web Portal and Mobile Technology applications, also known as the Technology Trilogy, provide all technological opportunities for the integration of the companies on a digital broadcast platform.

The company, which continues to broadcast from nearly 300 points in the education, food, retail, health, municipality, technology and finance sectors under the Digiplat brand, continues to develop itself in terms of both the sector and the broadcast screen. It continually enlarges its list of references thanks to the success and professionalism of its work.

Founded in 2008, the company positioned its first developed IPTV based “digital signage” application in the market. It continuously added new products with added values to its portfolio by adding new technologies via R&D activities.

The Company broke into the mobile applications market in 2011 with iPhone and android applications, and its Video On Demand system with IPTV base, which was specially developed for universities. It has also supported the sectors on issues upon request, by organizing its experience and accumulation of knowledge with respect to the requirements of the companies.

As a result, 2011 was a year of good progress for Alternatif Medya, in which the company enhanced its product range and achieved sound success as a result of the marketing and sale of these products. The company’s plans for 2012 include making the Digiplat brand the best in the sector, and focusing on sales and marketing activities, as well as R & D activities, to enhance the products it has developed with interactive features.

İHLAS MEDIA MARKETING

AND PURCHASE SERVICES INCLUDE

PRINTED MEDIA, TELEVISION,

RADIO, INDOOR - OUTDOOR

CHANNEL PURCHASE

SERVICES AND MARKETING

ACTIVITIES


İhlas Advertising Agency was established in 2005. With a combination of team spirit producing integrated solutions and teamwork, İhlas Media Marketing and Purchase Services operates as a Full Service Advertising Agency. It aims to be a pioneer for innovation, not a follower, and considers the companies it deals with as business partners rather than customers.

İhlas Media Marketing and Purchase Services offers its clients all types of advertising services under the title of advertising operations, including promotions, public relations, media purchases and channel marketing. Under the title of visual operations, İhlas Media Marketing and Purchase Services produces advertising, promotional and educational films, interactive CD / DVDs, 2D-3D animations, cartoons, digital and special effects and web design. Under the title of publishing operations, İhlas Media Marketing and Purchase Services produces print media ads, all forms of printing works, catalogues, brochures, inserts, billboards and signboards, large size vinyl signboards, graphic designs and all related applications. Under the title of audio operations, the İhlas Media Marketing and Purchase Services presents radio advertising, vocalization, dubbing and jingles.

İhlas media marketing and purchase services include printed media, television, radio, indoor - outdoor channel purchase services and marketing activities.

In the highly competitive environment of the sector, İhlas Media Marketing and Purchase Services implements a continuous process of self renovation, enhances its quality and is known as a creative, full service agency among its peers. The Company has adopted customer satisfaction as a key principle.

There has been a fundamental transformation in all sectors in recent times. As markets are integrated locally and globally and the media becomes widespread, competition in all sectors will intensify. If you want to grow against the competition, it is important to be a brand. İhlas media marketing and purchase services aims to make the companies it deals with take a step forward so that they can compete, especially in times of crisis.

İhlas Media Holding’s stakes in İhlas Media Marketing and Purchase Services stand at 99%.

İhlas Medya Planlama ve Satınalma Hizmetleri /İhlas Media Marketing and Purchase Services

İHLAS COMMUNICATIONS

WAS FOUNDED IN 2009 TO PROVIDE MOBILE VIRTUAL

NETWORK OPERATOR (MVNO)

SERVICES. İHLAS COMMUNICATIONS

HAS BEEN ACCREDITED

WITH THE MVNO LICENSE BY THE

INFORMATION TECHNOLOGIES

AGENCY TO PROVIDE SERVICES THROUGH VIPCELL

- ITS OWN BRAND


İhlas Communications was founded in 2009 to provide Mobile Virtual Network Operator (MVNO) services. İhlas Communications has been accredited with the MVNO license by the Information Technologies Agency to provide services through VipCell - its own brand.

İhlas Media Holding’s subsidiary İhlas Communications made a long-term collaboration agreement with Vodafone in October 2009. Within the context of this agreement, İhlas Group employees and their families will be provided with GSM and 3G services by Vodafone. It is planned to

continue this cooperation between the two companies on different projects for the foreseeable future.

In a very short period of time, İhlas Communications introduced subscribers to number transfer with the VipCell brand, by way of Vodafone’s service.

İhlas Communication is the proud owner of ISO / IEC 27001, Information Security Management System (ISMS) certificates.

‹hlas ‹letiflim Hizmetleri / İhlas Communications Services

THE JOINT VENTURE HAS

COMPLETED THE BİZİMEVLER-3

PROJECT IN ISPARTAKULE

WITH THE “INCOME SHARING” MODEL


İhlas Holding A.Ş. - İhlas Yayın Holding A.Ş. ve İhlas Pazarlama A.Ş. Ortak Girişimi (Bizimevler 3) Joint Venture of İhlas Holding A.Ş. - İhlas Yayın Holding A.Ş. and İhlas Pazarlama A.Ş.

Emlak Konut Gayrimenkul Yatırım Ortaklığı A.Ş. transferred its rights and liabilities, which are set forth in the contract it signed with respect to the construction project “Istanbul, Bahçeşehir, Ispartakule, Region 2, Section 1, Block 548, Parcel 1 distribution of income in return sale of land”, to İhlas Holding A.Ş. - İhlas Yayın Holding A.Ş. - İhlas Pazarlama A.Ş. Joint Venture. The project covers a total residential construction site of 85,700 m2.

It consists of 9 blocks and a shopping area, and there are 15 floors (Basement + Ground floor + 13) in each block.

The project includes 680 residences, an office area, a shopping mall, outdoor sports facilities, a swimming pool and other recreational areas, and is 98% completed as of 31.12.2011. 76% of the project, equivalent to 520 residences, was sold for advance payment.

4042

41İhlas Media Holding Annual Report 2011 43

İHLAS YAYIN HOLDİNG A.Ş.

BOARD OF DIRECTORS’ REPORT REGARDING THE ACCOUNTING PERIOD 01.01.2011 / 31.12.2011

42

a) Period of the Report: Annual Report for the Period January 1 - December 31, 2011

Company’s Name: İhlas Yayın Holding Anonim Şirketi

Names and Surnames, Limits of Authorization, and Terms of Office (Beginning and end Dates) of the Chairpersons and Members Who Took Charge at the Board of Directors and Board of Auditors, as well as Managing Directors:

Terms of Office Position Name Limits of Authority Starting and Ending Date Is Independently Authorized to Represent and Chairman AHMET MÜCAHİD ÖREN Have Binding Power Concerning the Company. 13.09.2010 *2013 Deputy Chairman, General Manager Is Jointly Authorized to Represent and Haveand Executive Member MUSTAFA RUŞEN SELÇUK Binding Power Concerning the Company. 13.09.2010 *2013 Is Jointly Authorized to Represent and HaveBoard Member NUH ALBAYRAK Binding Power Concerning the Company. 13.09.2010 *2013

Is Jointly Authorized to Represent and HaveBoard Member FEVZİ KAHRAMAN Binding Power Concerning the Company. 13.09.2010 *2013

Is Jointly Authorized to Represent and HaveBoard Member RIDVAN BÜYÜKÇELIK Binding Power Concerning the Company. 13.09.2010 *2013

Board Member and Chairman of the Is Jointly Authorized to Represent and HaveCorporate Management Committee ORHAN TANIŞMAN Binding Power Concerning the Company. 13.09.2010 *2013

Independent Member - Not Authorized to Board Member and Chairman of the Represent and Have Binding PowerCorporate Management Committee MELİH RÜÇHAN ARVASI Concerning the Company. 13.09.2010 *2013

Independent Member - Not Authorized toBoard Member and Chairman Represent and Have Binding Powerof the Audit Committee OSMAN DUMAN Concerning the Company. 13.09.2010 *2013

Independent Member - Not Authorized toBoard Member and Member Represent and Have Binding Powerof the Audit Committee TOLGA SÖNMEZ Concerning the Company. 13.09.2010 *2013

* He was elected for three years on September 13, 2010 to do his duty until the next General Meeting that will be held by the end of the third year.

İhlas Yayın Holding A.Ş.

Board of Directors’ Report


The duties performed by the Members of the Board of Directors outside the Company:

AHMET MÜCAHİD ÖREN İhlas Holding A.Ş. Deputy Chairman of the Board and General Managerİhlas İnşaat Holding A.Ş. Chairmanİhlas Pazarlama Yatırım Holding A.Ş. Chairmanİhlas Gazetecilik A.Ş. Chairmanİhlas Haber Ajansı A.Ş. Chairmanİhlas Gelişim Yayıncılık A.Ş. Chairmanİhlas Enerji Üretim Dağ. ve Tic. A.Ş. ChairmanKia-İhlas Motor San. ve Tic. A.Ş. Chairmanİhlas Oxford Mortgage İnş. ve Tic. A.Ş. Chairman

NUH ALBAYRAK İhlas Gazetecilik A.Ş. Board Member and Editor-in-Chief

MUSTAFA RUŞEN SELÇUK İhlas Gazetecilik A.Ş. Board Memberİhlas Gelişim Yayıncılık A.Ş. Board Memberİhlas Haber Ajansı A.Ş. Board MemberTGRT Haber TV A.Ş. Board MemberTGRT Dijital TV Hizmetleri A.Ş. Board Member and Finance Coordinatorİhlas Enerji Üretim Dağ. ve Tic. A.Ş. Board MemberKiler Alışveriş Hizmetleri Gıda San. ve Tic. A.Ş. Independent Board Member

FEVZİ KAHRAMAN İhlas Haber Ajansı A.Ş. Deputy Chairman

RIDVAN BÜYÜKÇELİK İhlas Enerji Üretim Dağıtım ve Tic. A.Ş. Board Member

ORHAN TANIŞMAN İhlas Gazetecilik A.Ş. Board Memberİhlas Haber Ajansı A.Ş. Board MemberAlternatif Medya Görsel İletişim Sist. Ltd. Şti. Company Director

MELİH RÜÇHAN ARVASİ İstanbul Uluslararası Danışmanlık Hiz. Tic. Ltd. Şti. Company Director

OSMAN DUMAN Han İnşaat Emlak Yatırım Tic. Ltd. Şti. Purchasing Manager

TOLGA SÖNMEZ Pelsan Aydınlatma San. ve Tic. Ltd. Şti. Finance Manager

There are no administrative sanctions or charges filed against the Members of the Board of Directors of the Company for acting contrary to the provisions of the legislations.

There have been no conflicts of interest between contractors or audit companies and the Company. There is no reciprocal shareholding exceeding 5%.

There are no ongoing lawsuits or enforcement proceedings as of December 31, 2011.

44

b) Main factors influencing the performance of the Enterprise, significant changes in the environment where the Enterprise operates, policies implemented by the Enterprise to deal with such changes, the investment and dividend policy implemented by the Enterprise to strengthen its performance:

The stability in the national economy brought a steadiness to the general level of prices. Rapid changes in technology made the use of technology, which had been more expensive in previous years, cheaper.

It is expected that this tendency will continue in the coming years. Periodical changes are possible in the use of raw materials that depend on natural resources (like paper).

Changes in technology enable the display of existing content in the media sector through different channels. Alternative channels are born. The development of the internet is expected to step up variety in means of communication. The same applies while changing the production and presenting of the business parallel to developing technology.

Some of the newspapers in the sector prefer to outsource printing jobs to the big companies and their facilities instead of setting up their own facilities.

Also some media companies establish their own news agencies in order to create their own news networks and reduce unit cost.

In television broadcasting thematic channels stand out.

In the magazine sector, publishing magazines on the internet is often preferred instead of printing them. Similarly they tend to organize virtual fairs.

Even though the printing business has been negatively affected by the development and spread of the internet, the economic development of the country has kept this negativity at a certain level, while expanding the need for printed material in different fields. This has balanced the use of printing capacity. Developing technology may help to reduce costs. The development of the communications sector raises the need of people to communicate and find different ways to meet this need. Greater purchasing power affects selling prices positively.

The most essential element affecting the financial situation of the partnership is political stability. Any fluctuation in this area may harm the financial situation in terms of fixed cost since it can affect revenue. In addition, capital structures with low competitive strength that are willing to enter the sector affect activities, as can strong foreign capital. Frequency configuration in the television sector and possible regulations can also lead to obscurity. In order to reinforce the performance of the corporation we need to conduct a policy in which the investments of the subsidiaries are funded with net profit gained from production, which means they are funded with their own shareholders’ equity.

c) Sources of finance and risk management policies of the Enterprise:

Sources of FinanceRequired financial resources are provided from the Company’s equity capital and/or foreign sources. Due to their costs and taxable liabilities, foreign sources are preferred if they are deemed to be more profitable. Foreign sources include Bank Loans, Leasing, and Factoring.

Risk in CollectionThe Group’s risk in collection generally arises from its trade receivables. Trade receivables are evaluated by the Group management in the light of past experiences and current market conditions and provisions for doubtful receivables are allocated at reasonable levels. Provisions have been allocated for doubtful receivables until the report date.

Exchange Rate RiskThe exchange rate risk resulting from changes in the value of any financial instrument because of variations in exchange rates. As of the date of preparation of this report, the balance of foreign currency transactions, created through operation, investment and financial activities of the group are stated in Annex 38. Since the net foreign currency positioning of the group is (-) as of 31.12.2011, a foreign currency risk arises in situations where exchange rates fall in favor of the TL (in situations where TL gains value against foreign currency).

Liquidity RiskLiquidity risk refers to the risk of any enterprise encountering difficulty in raising funds in order to fulfill their commitments regarding financial instruments. The Group manages its liquidity risk by balancing the maturity distribution of its assets and liabilities.




ç) Other matters not included in financial statements, but can be useful for users:

None.

d) Significant incidents that took place between the closing date of the accounting period and the date of publication of the related financial statements:Approval of the financial tables

Consolidated financial tables of the Holding dated December 31, 2011 were approved by the Board of Directors on March 20, 2012. Only the Holding’s Executive Board has the authority to change the consolidated financial tables of the Holding approved by the Holding Board of Directors.

Increase of the Participation Share in IHA

The Holding decided to acquire all of the 25% shares of İhlas Marketing in İhlas News, one of the group companies, through Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş., according to the valuation report based on the "Discounted Future Cash Flow Analysis Method" with respect to the information dated September 30, 2011, at a price of TL 22,625,000, at the Board of Directors Meeting held on January 23, 2012.

e) Projections on the development of the Enterprise

İhlas Media Holding facilitates all kinds of printed, video and audio broadcasting, advertising, news agency and similar sectors. The Holding takes necessary steps in order to enhance its achievements in its areas of activity, assure its regularity, retrench the fiscal burdens of the companies it founded or joined by arranging common service areas, and boost productivity in these companies by means of advanced organization techniques.

TGRT News TV preserves its correct, objective identity promoting accurate news, and announcing as its principle that "TGRT News only features news". TGRT News, which presents its audience with news from Turkey's and the world’s agenda through live news bulletins every hour on the hour, 24 hours a day, and features programs on which current issues are discussed by specialists in the related areas, as well as its successful reporting, completely renewed its equipment by investing in renovations in 2011. It is also planning to initiate HD broadcasting in the first quarter of 2012.

İhlas Journalism won the Scientific and Technical Research Institute of Turkey (TÜBİTAK) and Presidency of Religious Affairs tenders, and the projects have been completed as of the end of the year. İhlas Journalism will participate in tenders of private and other organizations, and will exert maximum effort in boosting capacity usage of, and developing, printing activities.

İhlas News Agency plans to increase the number of countries it operates in, and to adapt new technologies in every field in accordance with demand, in 2012. It is also planned to initiate HD (High Definition) video service to its subscribers and clients, and to provide HD broadcast and transmission services during 2012. Within this framework, the Company is going to continue its HD investments, and plans to purchase 13 shoulder cameras and 27 semi-professional handy-cams in the first phase. To this end, work on purchasing a sufficient number of HD encoders is also underway. HD broadcasting from many points will be possible after this purchase. Millions of news texts and photographs are digitally stored on İHA’s digital archive. Developing software to enable access to these treasures kept in the digital archive and putting them at the service of users is one of our 2012 projects. During 2011, İHA renewed its existing machine park by leasing to a value of $ 1,267,000 in order to purchase cameras, uplinks, live broadcasting vehicles, servers and personal computers. The Company is planning to make a revised investment of approximately $ 1.5 million in 2012 to purchase six live broadcasting vehicles and two flyaway uplink systems within the scope of its investments. The high capacity memory units were put into use, a server virtualization technology was launched in 2011, and a more productive, flexible and economic information technology structure called cloud architecture was established within this frame. The automation software used for the management of operational activities at home and abroad was changed for new, more functional software. Moreover, a CRM software program, which was fully developed by İHA, was activated so that the subscriber management system used by the marketing department could meet current requirements faster and more efficiently. The news automation system, wherein the software will also be developed by İHA, will be put into use in 2012 to enable direct entry of the news to the system from anywhere internet access is available. This innovation will contribute to the exponential expansion of the current news reporter and copy editor network, and to faster transmission of the news to the client.

The 2012 targets of Communications Magazine can be summarized as: to publish a magazine about yarns and to organize the traditional show and awards ceremony called “Printing Press Sector Charts" during the Drupa Fair organized once every four years in Dusseldorf, Germany, and hence make a worldwide promotion of the sector.

İhlas Fair Services plans to add new fairs to its portfolio. A number of R&D studies are under way with the various sector authorities and fairground owners.

46

f) Report in Compliance with Corporate Governance Principles:

1. Declaration of Compliance with Corporate Governance Principles

Our Company was offered to the public in 2010 and since the public offering we have exerted maximum efforts to comply with the “Corporate Management Principles of the Stock Market” (Principles) in corporate management activities.

Our Company established its core contract within the frame of the Principles and developed its organization around these principles. Accordingly, in order to comply with these Principles, our Holding's Executive Board is composed of one executive, five non-executive and three independent members apart from the Chairman of the Assembly and the Chief Executive. This means that eight (8) of our Board is composed of non-executive members and three (3) of them are independent members.

Independent member Osman Duman is president of the Audit Committee and non-executive member Orhan Tanışman is president of the Corporate Management Committee, two committees established within the Board of Management. Tolga Sönmez, one of our independent members still carries out his duty in the Audit Committee while the other independent member Melih Rüçhan Arvasi is on the Corporate Management Committee.

Ümit Fırat, holding Capital Market Activities Advanced Level Licence and Corporate Governance Rating Specialist Licence, is in charge of the Shareholder Relations Unit, established to organize relations. Ümit Fırat is responsible for meeting obligations arising from capital market law and coordinating corporate management activities. In cooperation with our Corporate Management Committee, our Shareholder Relations Unit answers questions raised by investors as part of our “Information Policy”.

Until 2012, issues that do not fully comply with the Principles were observed fully by our Company and it is seen that those issues do not cause a conflict of interest in the current situation.

MUSTAFA RUŞEN SELÇUK RIDVAN BÜYÜKÇELİKDeputy Chairman of the Board of Directors, Member of the Board of DirectorsGeneral Manager and Executive Director

SECTION I - SHAREHOLDERS

2. Shareholders Relations Unit With the start of the public offering process a Shareholder Relations Unit was established and Hilal Arıkan was assigned to this unit. Also Ümit Fırat, holding an advanced level license in Capital Market Activities and Expertise in Corporate Governance Rating, was apportioned responsibility to make sure the obligations mentioned in the first paragraph of the article 8 of the Communiqué on Principles Regarding Joint-Stock Corporations Subject to Capital Market Law (serial IV, No:41), and coordinating corporate management activities.The contact information of the Unit is:

İhlas Yayın Holding A.Ş. Shareholders Relations Unit29 Ekim Cad. No: 23, 34197 Yenibosna / IstanbulTel: 0(212) 454 24 22 - Fax: 0(212) 454 24 27Hilal Arıkane-mail: [email protected]Ümit Fırate-mail: [email protected]

As of the end of December 2011, all e-mails received through these communication channels were responded to, and questions by either domestic or foreign investors were also answered.

It was assured that investors were comprehensively informed by taking active roles in the preparation of the Company's Annual Report. The company’s corporate web site was re-designed within the frame of the developing and changing structure of the Company and the




Corporate Governance Principles declared by the CMB, under the coordination of the Investor Relations Department. It has been regularly updated since that date within the scope of these principles. 3. The Use of the Shareholders' Right to Obtain Information

During the period, questions regarding the Company's operations and performance in the Stock Exchange were responded to, unless the information had not been publicly disclosed, was deemed as being confidential or contained trade secrets, as defined by the CMB regulations and the Turkish Commercial Code.

The Company's Annual Report and the latest financial statements were presented on the web site. Other questions were also responded to in writing. The electronic medium has been actively used on a daily basis in supplying such information.

No requests for the appointment of a Private Auditor were received, and no individual rights were instituted in this respect.

4. General Assembly Information 2010

The General Assembly convened at the Holding's Head Office on April 8, 2011 at 15:30 local time, with the attendance of nine participants (all shareholders), holding 71.25% of the capital stock. The announcement for the General Assembly was published in the Istanbul Trade Registry on April 15, 2011 and was also announced in the Turkish Trade Registry Gazette numbered 7799 on April 21, 2011.

An announcement of the General Assembly was made in Türkiye and Dünya Newspapers, together with the Turkish Trade Registry Gazette dated March 16, 2011, and the announcement was also published on our web site. Fax or e-mail messages were sent to those who had requested information by telephone. Answers were given to investors among the shareholders who used their right to submit questions. Announcements were made in electronic form to enable participation in the General Assembly. The required documents were presented on the website. The General Assembly minutes were made available to shareholders on the website and at the Financial Affairs Coordination Unit.

The Board of Directors Annual Report, Auditors Report, Summary of the Independent Audit Report of PürBağımsız Denetim ve Yeminli Mali Müşavirlik A.Ş., as well as the Summary of the Balance Sheet and Income Statement which were prepared according to the provisions of CMB’s Communiqué - Serial XI, No. 29, and the Balance Sheet and Income Statement prepared according to legal records, and the Board of Directors proposal in respect of the results of the 2011 period, were submitted for the attention of shareholders at the Company’s registered office 21 days prior to the date of the Annual General Assembly.

No rules were added to the articles of association stating that decision on division, purchasing, selling and hiring of large amounts of assets should be restricted to the Board of Directors.

5. Voting Rights and Minority Rights

If the General Assembly of the Holding decides that the Board of Directors consist of 5 people, at least 4 of the Members of the Board of Directors are selected from among candidates nominated by group (B) shareholders. Similarly, at least 5 of the members are selected among those candidates if a board of 7 people is decided, at least 7 of the members are selected from among those candidates if a board of 9 people is decided, and at least 9 of the members are selected from among those candidates if a board of 11 people is decided.

If the General Assembly decides the number of comptrollers as one, this comptroller is selected from among the candidates nominated by group (B) shareholders. Similarly, at least two of the comptrollers are selected from among those candidates if a comptroller number of three is decided.

Type A shareholders have 1 (one) vote per share in ordinary and extraordinary meetings of the Board of Directors.

Type B shareholders have 100 (one hundred) votes for each share in ordinary and extraordinary meetings of the Board of Directors. All rights originating from article 387 of the Turkish Trade Act are reserved.

Article on voting privilege in the articles of association is stated above.

No companies exist with reciprocal shareholding. The affiliated companies have no participations in the company. Minority interests are not represented in the management and no method of cumulative voting is provided in the Articles of Association.

48

6. Profit Distribution Policy and Date of Profit Distribution

The Board of Directors determined the below written Profit Distribution Policy at the meeting numbered 2011/07, which was held on March 18, 2011 in accordance with the recommendation of the Corporate Governance Committee dated March 16, 2011 numbered 2011/02. The aforementioned policy was announced to the public on March 18, 2011 through the Public Disclosure Platform (KAP), and was also submitted for the information of the General Assembly at the 2010 Ordinary General Assembly Meeting dated April 8, 2011.

DIVIDEND DISTRIBUTION POLICY (Profit Distribution Policy for 2010 and Following Years.)

a) The portion of revenue that should be legally set aside according to the Turkish Trade Act, Tax Procedural Law, Capital Markets Law, Principles of the Capital Markets Board and related articles of the Company’s articles of association is set aside. Once set aside, the distributable revenue is determined.

b) Profit will be allocated in proportion with the minimum profit share amount designated by the Capital Markets Board. Arising needs of the Company’s growth trend, profitability, strategic objectives, investment projects and net working capital will also be taken into consideration. The related articles of the Turkish Trade Act, Tax Procedural Law, Capital Markets Law, Principles of the Capital Markets Board and related articles of the Company’s articles of association will be complied with. Bearing in mind the potential profit share of the Company, the Executive Board can always decide to share more than the minimum profit allocation amount and propose this to the Board of Directors for approval.

c) Once the profit sharing decision is made, it is up to the Executive Board to decide on the method. It can be either cash and / or opt for a bonus share. This is then proposed to the Board of Directors for approval.

d) A grant in profit allocation is not in question. The profit is distributed equally between all existing shareholders no matter what the issuance and acquisition dates may be.

e) There is no article in the articles of association on profit allocation to managers and workers.

f) The shared profit will be distributed within legal regulations and article 29 of the Company’s articles of association following the approval of the General Assembly of Shareholders and on the date decided once again by the Board of Directors.

g) Referring to article 28 of the articles of association, if the Board of Directors authorizes the Executive Board, and with the decision of the Executive Board, it is possible to give advance profit share to our partners.

h) The management informs the public on donations and charity work made during the year and those that are planned to be made at the end of the year.

i) During profit allocation the management pursues a coherent balance between the interests of the shareholders and the Company.

A grant in profit allocation is not an issue. According to article 28 of the Company’s articles of association, regarding the principles of profit allocation, and article 29, regarding the date of the allocation;

PROFIT ALLOCATION (Turkish Trade Registry Gazette number 7651, dated September 20, 2010)Article 28:

A. DividendDividend is designated based on the Turkish Trade Act, Capital Markets Law and generally accepted accounting principles. Dividend is the amount left at the end of the accounting year and shown in the annual financial statement after sums such as general expenses and diverse depreciations that must be paid by the Company are deducted. Taxes that must be paid by the corporate body are deducted from the revenue determined at the end of the accounting year. Deficit from previous years, if any, is also deducted from that amount. What is left is allocated according to the following:

Primary Legal Reservea. A legal reserve of five percent (5%) of the net profit is separated up to one fifth of the paid-in capital.




First Dividendb. A first dividend is separated at a rate decided by the Capital Markets Board from the amount remaining after the sum described in paragraph (a) is deducted from the profit.

Second Dividendc. The General Assembly is authorized to decide whether to allocate some or all of the amount remaining once the sums of dividend described in paragraphs (a) and (b) are deducted from the net profit, or to set aside an auxiliary reserve.

Secondary Legal Reserved. One tenth of the amount of the profit remaining, after 5% of the paid-up capital is set aside from the sum decided to be allocated to shareholders and other participants, is set aside as secondary legal reserve according to the third sub clause of the second paragraph of article 466 of the Turkish Trade Act.

e. Before the legal reserves that must be put aside according to law, and before the first dividend is distributed in cash and / or as shares, it cannot be decided to separate reserves, endorse profit for the next year and allocate dividend to preferred shareholders, owners of participation, constituent and redeemed shares, members of the Executive Board, officials, clerks, employees, foundations of any sort and individuals and / or institutions of this sort.

f. If not contravening the 15th/last article of the Capital Markets Law, if necessary explanations are given and on condition that donations made during the year are presented to the knowledge of the members of the Board of Directors, it is possible to set aside part of the dividend for members of the Executive Board, officials, clerks, employees, foundations of any sort and individuals and/or institutions of this sort.

g. Dividend is distributed equally to all existing shares by the accounting period no matter what their issuance and acquisition dates may be.

h. The type and the date of the profit allocation are decided by the Board of Directors upon the proposal of the Executive Board. It complies with the articles of Capital Markets Law.

B. Advance DividendIf authorized by the Board of Directors and complying with article 15 of Capital Markets Law and other communiqués of the Capital Markets Board, the Executive Board can distribute advance dividend limited to the related year. The authorization of distributing dividend, given to the Executive Board by the Board of Directors, is limited to the year that the authorization is given. Before the advance dividend of a previous year is fully entered into account, no extra or new advance dividend can be distributed.

DATE FOR PROFIT DISTRIBUTION (Turkish Trade Registry Gazette number 7651, dated September 20, 2010)Article 29:

The date of the profit distribution is decided by the General Assembly upon the proposal of the Executive Board. It complies with the articles of the Capital Markets Law. 7. Transfer of Shares

According to article 8 of our articles of association titled Transfer of Shares; in order to transfer Type B registered stock, it must be offered to other type B shareholders at its current value. If none of the type B shareholders take up the offer within a month, then they can be sold to others. Any possession other than that would be null and void, and cannot be registered in the share ledger.

The above mentioned matters are applied even if there are pledges, confiscations or any other limited property rights. Sales through Compulsory Executions rights described in this article are kept as well. If these principles are not complied with, the Administrative Committee is authorized to absent the sale, assignment or right ownership from the share ledger.

However, if there is an obligatory assignment or transfer of share originating from the mandatory execution of Turkish laws in case of pledges, compulsory executions, heritage and other limited property rights the shares are offered to other Type B shareholders at the current value. If an offer is not taken up within 30 days, sale to others is allowed.

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SECTION II - PUBLIC DISCLOSURE AND TRANSPARENCY

8. The Company Information Policy

Along with the procedures of the public offering, the Company Information Policy is designed as follows. This policy was submitted for the information of the Shareholders at the 2010 Ordinary Meeting of the General Assembly held on April 08, 2011.

Purpose

With the offering of its shares to the public, it is the primary principle of our Company’s information policy to publicize accurately, completely and with sufficient information content in due time, the developments which might have an impact on the value of all capital market instruments offered by our Company; to make no discrimination among Capital Market Participants (shareholders, investors, capital markets experts, brokerage houses) in the employment of information review rights; to offer the information publicized by the Company in a comprehensible and interpretable manner, accessible at low cost and equally by those individuals and corporations who will benefit from such information in making their own decisions.

Regarding public disclosures, arrangements drawn up by the Capital Markets Board (CMB) and Istanbul Stock Exchange (ISE) are complied with and maximum attention is paid to the implementation of principles set forth in CMB’s Principles of Corporate Governance.

It is the primary principle of the Company’s Information Policy to use the internet, electronic mail, press releases, and media organizations effectively in addition to the means anticipated by laws and regulations; and to comply with all the rules promulgated or to be promulgated by the CMB.

Responsibility

The Board of Directors is responsible for the monitoring, reviewing and development of the Information Policy. The Corporate Governance Committee provides information and offers suggestions to the Board of Directors, Board of Auditors and Financial Affairs Coordination Unit on the “Information Policy”.

Public Disclosure Methods and Instruments

Due to the responsibility assumed pursuant to the provisions of the Capital Markets Regulations and the Turkish Commercial Code, our Company uses the following basic public disclosure methods:

- To release the necessary special situation announcement to the ISE and to place such announcements on our website www.ihlas.com.tr in accordance with the forms stated in CMB’s Communiqué of Principles on the Public Disclosure of Special Situations - Serial VIII, No. 54, if a special situation arises in compliance with the communiqué,- To announce financial statements and their footnotes, independent audit reports, declarations and annual reports to the Public Disclosure Platform and on our website, - To include the prospectus in the Turkish Trade Registry Gazette and on our website and to place the circular note in daily newspapers and our website during capital increase,- To ensure that declarations and announcements such as summons for the General Board, dividend payments, etc. are published in the Turkish Trade Registry Gazette and daily newspapers.

Legislation-based explanations mentioned above, issued by our Company to the capital market participants, are submitted to investors;

- By appearing in written and visual media or through data distribution institutions such as Reuters, Foreks, etc. or- At informative negotiations and meetings held in person with capital market participants or through teleconference facilities.

Public Disclosure of Financial Statements and Authorized Officers

Our Company’s financial statements and their footnotes are prepared on a consolidated basis and in accordance with International Financial Reporting Standards (IFRS). Financial statements are subject to independent audit, based on independent audit standards published by the Capital Markets Board and submitted for the approval of the Board of Directors following the approval of the Audit Committee. After the attestation is signed by the authorized members of the Board of Directors, financial statements are disclosed to the public.

Following the approval of the Board of Directors, financial statements and their footnotes, as well as independent audit reports and their annexes are submitted to the Public Disclosure Platform in electronic form for publication in line with CMB and ISE regulations. Financial statements and their footnotes are also submitted through an electronic environment via KAP (Public Disclosure Platform) Submission.




Public Disclosure of the Annual Report and Authorized Officers

The Annual Report is prepared in accordance with the regulations of the Capital Markets and the Principles Corporate Governance as set out by the CMB, submitted for the approval of the Board of Directors and disclosed to public on the Public Disclosure Platform and on our website.

Capital market participants may obtain the Turkish and/or English version of the Annual Report from our Company’s Investor Relations Department.

Public Disclosure of Special Situations and Authorized Officers

The Company’s special situation announcements are prepared under the responsibility of the Financial Affairs Coordination Unit and signed and submitted to the Public Disclosure Platform together with the authorized members of the Board of Directors.

Keeping Related Information Confidential Until Special Situations are Disclosed to the Public

In order to keep related information confidential until special situations are disclosed to the public, no information other than that which had already been disclosed to the public is disclosed in one-to-one or collective meetings / negotiations with capital market participants / third persons. Changes related with disclosures made by the Company to the public, that arise afterwards, are disclosed to the public with special situations disclosures.

Officers Authorized to Disclose Information to the Public

Apart from the notifications stated above, written and / or verbal information requests submitted by capital market participants are replied to by the Financial Affairs Coordination Unit or the Investor Relations Department depending on the content of the request, provided that confidential information or trade secrets are excluded.

Only the Members of Board of Directors are allowed to issue press statements to written and / or visual media.

Apart from the above persons, Company employees are not permitted to answer questions forwarded to them by capital market participants, unless they are commissioned especially. Incoming information requests are forwarded to the Investor Relations Department.

In line with the information management policy, information regarding the Company’s management, legal status and the Company’s projects is only disclosed to the public by the commissioned managers or the members of the Board of Directors, with the exception of information requested in line with respective legislation.

Criteria Sought in the Determination of People with an Administrative Responsibility

Those who hold administrative responsibilities within the Company are selected from among individuals, who have a high level of knowledge and skill, specific experience and past, and information regarding the Company’s field of activity and management, are qualified and preferably university graduates, as stated in the Corporate Governance Principles published by the CMB.

Communication with Capital Market Participants

Our Company does not direct regarding the expectations of the results of semiannual and annual activities. Instead, it prefers to share the critical matters affecting the results of its activities, its strategic approaches and the significant factors that allow the sector and the environment where the Company operates to be better understood with capital market participants.

Unless otherwise stated in the Information Policy, only those officers authorized to disclose information to the public may communicate with capital market participants on behalf of our Company. No information not yet disclosed to the public or important / private information is disclosed at the non-public negotiations held with capital market participants.

Face-to-Face Meetings or Phone Calls

Face-to-face meetings or meetings held by phone with capital market participants personally or in groups are a significant part of the investor relations development programs. In such environments, our Company shall not disclose any new information, shall not update information which was previously disclosed to the public or shall not disclose any important and/or private information which was not formerly disclosed to the public.

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Furthermore, investor information meetings shall be organized where the Company's operations are required to be shared with investors in detail and / or as required by the Board of Directors. Requests for appointment with the Board of Directors or management by the press will be evaluated by the Investor Relations Unit and appointments will be organized with the approval of the Corporate Governance Committee. Use of the internet will be encouraged for forwarding questions in writing by potential investors, shareholders, stakeholders, the press and financial institutions representing investors; however, all questions will be answered by the Investor Relations Unit under the Information Policy.

Informing Small Investors

In order to provide interactive information and prevent speculation, no new information shall be disclosed; information previously disclosed to the public shall not be updated; and private information not previously disclosed to the public shall be disclosed in presentations and/or reports made public in introduction meetings, information meetings or press conferences held with specific groups of investors.

All such disclosures shall without fail be included in the website. The content of the website is updated with special situation announcements, also taking into account the fact that there are investors who lack access to the internet. The primary principle of the Company’s Information Policy is to use the internet, electronic mail, press releases, and media organizations effectively in addition to means anticipated by laws and regulations; and to comply with all the rules published or to be published by the CMB.

Internal information shall principally be disclosed to the public by our Company on the date when it becomes a responsibility to do so. However, disclosure of the internal information may be postponed pursuant to Article 15 of the Communiqué by providing the confidentiality of such information when necessary so that the legal interests, rights and benefits of our Company are not harmed. For the disclosure to be postponed, our Company’s Board of Directors shall reach a decision regarding the postponed information, the impacts of the postponement on the protection of our Company’s legitimate rights, the fact that the postponement poses no risk of misleading investors and the measures taken to protect the confidentiality of such information during the duration of the postponement.

As soon as the reason for the postponement of the disclosure of internal information to the public is removed, related explanations shall immediately be provided to the public and submitted to the ISE by our Company on the basis of such internal information.

Untruthful News and Rumors in the Market

News and rumors about the Company appearing in media organs and in the public are followed by our Investor Relations Directorate on an up-to-date basis. When news or rumors appear in media organs and/or in the public regarding our Company, and in the event that they are of a degree of significance such that they affect the investment decisions of investors or influence the value of capital market instruments, and which had not been disclosed by individuals authorized to represent our Company (other than information already disclosed to the public through special situation announcements, prospectuses, circular notes, proclamation texts approved by the Board, financial reports and other public disclosure documents), necessary explanations shall be provided by the associates in pursuance with Article 18 “Confirmation of News and Rumors” of the Communiqué on whether such news and / or rumors are true or sufficient.

However, no special situation announcement shall be made if the information in such news and / or rumors is composed of information which had been disclosed through special situation announcements, circular notes, prospectuses, promulgation texts approved by the Board and financial reports and did not include any additional information.

Announcement of Expectations

Our Company may announce its expectations from time to time in compliance with its Information Policy. In written documents in which expectations are stated, the assumptions that such expectations are based on, and the motives they were prepared in accordance with, shall also be explained. Such explanations shall clearly state that the actual results may differ from expectations due to possible risks, uncertainties or various other reasons. Future-oriented information included in public disclosures shall be explained along with the grounds that the forecasts are based on, as well as statistical data. Information shall not include groundless or exaggerated projections, shall not be misleading and shall be associated with the Company’s financial status and results of its operations.

In public disclosures, in the event that forecasts and their grounds stated in regular financial statements and reports are not realized or understood not to be realized, revised information, statements and reports along with their grounds shall be immediately disclosed to the public.

Expectations shall be announced only by those persons authorized to issue public disclosures and by explicitly expressing the above stated warnings or by making reference to a written document (such as press release, information document, explanation formerly made within the framework of the Capital Markets Legislation, etc.) which is already disclosed to the public.

In the event that there is a significant change in the Company’s financial status and/or operations or in cases in which it is expected that a significant change will take place in the near future, public disclosure is made within the framework of the Company’s Public Disclosure Policy, provided that provisions stated in related regulations are preserved.




Website

In public disclosure, as suggested in the CMB’s Corporate Governance Principles, the Company’s website on the Corporate Website internet address (www.ihlasyayinholding.com.tr) is actively used. Explanations made on the Company’s website shall not replace the notifications and the special situation announcements that have to be made pursuant to Capital Markets Regulations. All public disclosures shall be made available for access through the website.

The website is designed and divided into sections accordingly. All required security measures regarding the website are taken. The website is prepared in Turkish and English, and arranged to follow the form and content as stipulated in the CMB’s Principles of Corporate Governance. In particular, room on the website is given over to the announcements for Annual General Meetings, items on the agenda, information documents related to agenda items, other information, documents and reports related to the items on the agenda and information regarding methods of participating in the General Board in a proper manner. Efforts to effect improvements in the website are continuously ongoing.

9. Special Situation Disclosures

All information on exceptional situations given after our Company was listed on the Istanbul Stock Exchange in 2010 complies with the Capital Markets Board’s communiqué on the principles regarding the explanation of exceptional situations to the public (Serial VII, No: 54). By the end of December 2011 we made 15 exceptional occasion explanations. These explanations made by our Company were prompt and complete and the Capital Markets Board did not request for further explanation.

10. The Company’s Website and Content

The company website can be conveniently accessed at www.ihlas.com.tr, and includes all the information cited under Section II, Article 2.2 of the CMB’s Corporate Governance Principles.

On the website: The “Corporate” page includes the company management organization, The “Affiliates” page includes information about all of the company’s operations, The “Corporate Governance” page includes all information required to be disclosed under the Corporate Governance Principles, The “Investor Relations” page includes all financial information, the organization of the Company and participations, detailed information such as special situation announcement and internal information and related operations, The “News” page includes all announcements made by the company and press information; The “Career” page includes application procedures for those seeking employment in our Group and the “Contact” page includes contact information such as address, telephone, e-mail.

11. Announcement of Individuals who are Ultimate Controlling Shareholders

The company’s shareholding structure is disclosed on the website free from indirect participation relationships. All changes are immediately displayed in the tables.

12. Announcement of Persons Who Have Access to Inside Information

The list of persons who have access to inside information are:

Name Title Dr. Enver Ören İhlas Yayın Holding A.Ş. Company PartnerAhmet Mücahid Ören İhlas Yayın Holding A.Ş. Chairman of the Board and Company PartnerMahmut Kemal Aydın İhlas Yayın Holding A.Ş. Company PartnerMehmet Nurettin Yağcı İhlas Yayın Holding A.Ş. Company PartnerMustafa Ruşen Selçuk İhlas Yayın Holding A.Ş. Chairman of the Board, General Manager and Executive MemberNuh Albayrak İhlas Yayın Holding A.Ş. Board MemberRıdvan Büyükçelik İhlas Yayın Holding A.Ş. Board MemberFevzi Kahraman İhlas Yayın Holding A.Ş. Board MemberOrhan Tanışman İhlas Yayın Holding A.Ş. Board MemberMelih Rüçhan Arvasi İhlas Yayın Holding A.Ş. Board MemberOsman Duman İhlas Yayın Holding A.Ş. Board MemberTolga Sönmez İhlas Yayın Holding A.Ş. Board MemberMustafa Erdoğan İhlas Yayın Holding A.Ş. Financial Affairs Manager

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Sırrı Söztutan İhlas Yayın Holding A.Ş. Secretary to the BoardÜmit Fırat İhlas Yayın Holding A.Ş., Capital Markets Compliance and Corporate Management Director Hilal Arıkan İhlas Yayın Holding A.Ş. Investor Relations Unit ResponsibleHayati Çiftlik İrfan Bağımsız Denetim ve YMM A.Ş. Responsible Partner Chief Auditor (Full Approval)Şükrü Yavuz Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Responsible Partner Chief AuditorHüseyin Perviz Pür Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Responsible Partner Chief AuditorErcan Çardak Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Chief AuditorUğur Yıldırım Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Chief AuditorNilgün Karataş Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. AuditorFunda Songül Şahin Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. AuditorSerkan Terzi Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. AuditorFaruk Çardak Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Assistant AuditorÖzkan Yavuz Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Assistant AuditorGürsoy Orman Pür Bağımsız Denetim Yeminli Mali Müşavirlik A.Ş. Assistant Auditor

SECTION III - STAKEHOLDERS

13. Informing Stakeholders

All questions forwarded by stakeholders during the period have been answered by the relevant units. No special medium was developed for such purposes, and existing information channels were used.

The Company’s official web address, ihlasyayinholding.com.tr, has been actively used for both answering questions and making announcements.

14. Participation of Stakeholders in the Management

An e-mail address, [email protected], was introduced and announced to employees, facilitating participation in management and freely communicating all complaints and suggestions. It has been noted that suggestions sent to the official e-mail address, [email protected] should also be taken into consideration.

15. Human Resources Policy

Our Company's human resources policy is as follows:

İHLAS YAYIN HOLDING HUMAN RESOURCES MANAGEMENT VISION AND POLICIES

Our Vision• To establish a team sprit where trust, respect, lucidity and social responsibility assure organizational unity.• To possess a work tempo without time and limits.• To generate maximum productivity by conducting studies and organizations to employee motivation.• To create a work environment where employees work in peace, and trust their company.• To support the professional development of employees through training both in and outside the Company.• To reward employees for their successful work.

Our Basic Policy• To make sure that our organizational structures are dynamic in the face of change, parallel to our vision and objectives.• To ensure an efficient and productive workforce working under the guidance of the company’s main objectives, developing all systems in terms of individual and team performance within the context of process development, improving employees’ professional skills to support their own performance, the corporate performance and for their career enhancement.• Adherence to democratic principles of recruitment by not discriminating between candidates based on religion, language, sex or race during search, selection or during their employment.• Preference to take disciplinary and regulatory measures rather than impose prohibitions.• Recruitment of employees who have outstanding academic credentials, are ethically conscious, demonstrate high emotional intelligence, display no behavioral problems, are open to dynamism and changes, able to think positively, exhibit superior delegation skills and relate to corporate values.




Functional Policy• To set up a friendly atmosphere so that all employees will contribute to the company,• To treat all employees equally and fairly,• To provide all employees with equal opportunities so that they can contribute to the company, to the team they work in, and will self-improve to the utmost level,• To help all employees utilize their skills, mental capacities and value production in the direction of corporate objectives,• To establish and update systems that offer opportunities to employees for career development in the company (or subsidiaries), by bearing in mind the needs of the company, individual talents and professional goals,• To establish and update performance and pay systems in accordance with the structure of the company; carrying out performance, career and salary appraisals in the fairest way,• To make sure that employees will have clear and explicit information about how their role, capacities, authorities, responsibilities and work contribute to the main objectives of the company,• To notify all employees in advance about a system to be introduced and decisions about targets,• To achieve multi-dimensional interaction and communication during Human Resources Management practices,• To collect, sort and update all information, files and administrative data concerning employees,• To establish an all-embracing and integrative corporate culture,• To organize social and cultural activities that will prompt feelings owning up to the corporate culture and increase morale/motivation,• To revise human resources systems steadily to catch up with the developments in the world, while remaining loyal to beliefs/values of the company,• To extend training activities in a fair manner, within a certain budget and system to develop personal skills of employees,• To introduce necessary regulations and drafting procedures so all employees will have the same rights and their performance will be facilitated,• To offer assistance as soon as possible in case of any personal problems that may befall employees.

16. Information Concerning Relations with Customers and Suppliers

In all subsidiaries, special emphasis is placed on relations with customers and suppliers around efforts of total quality management. In-house training is carried out; as expressed by the board chairman "Our credibility is more important than our money", all consumer problems are approached by the assumption that the consumer is right, and solutions are worked out by the same perspective. A web address, [email protected], was set up in order to make sure that any operation which our stakeholders (composed of shareholders, clients, suppliers and employees) think is against laws or our Company’s internal ethics, can make their feelings known. This address is directed to the Supervisory Board of the Executive Board. All information about the petitioner is kept confidential. All applications are evaluated by the Supervisory Board and then the necessary measures are taken. The petitioner is also informed about the results of their application. 17. Social Responsibility

Founders and employees of İhlas Group have come together around the maxim, "the best kind of person is one who provides good service". Our priority is to serve humanity regardless of religion, race, sex or age.

Effective and efficient usage of the world’s resources, respect for the environment and honoring social responsibilities are indispensable parts of serving humanity. Individual peace of mind is primarily achieved through a good education and a healthy life. For this reason at certain intervals we publish “Green Page” in Türkiye Newspaper, one of our Group’s publications. Also, again at certain intervals, we publish a “No-Handicap Page” for the handicapped. Another of our Group’s publishing channels, TGRT News, also broadcasts for the environment and the handicapped and also sponsors meetings, conferences and seminars organized on these issues. Our Company performs no activity that may harm or violate the environment. No legal or financial court cases pertaining to this issue have been faced.

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SECTION IV - BOARD OF DIRECTORS

18. The Structure and Composition of the Board of Directors and Independent Members

Ahmet Mücahid Ören Chairman of the BoardMustafa Ruşen Selçuk Deputy Chairman of the Board, General Manager and Executive ManagerNuh Albayrak Member of the Board Fevzi Kahraman Member of the Board Rıdvan Büyükçelik Member of the Board Orhan Tanışman Member of the Board and Corporate Management Committee ChairmanMelih Rüçhan Arvasi Independent Board Member and Corporate Management Committee MemberOsman Duman Member of the Board and Audit Committee Chairman Tolga Sönmez Member of the Board and Audit Committee Member

Our Board of Directors is made up of 9 members, not including the Chairman of the Board and the Executive Chairman, one Executive and three Independent Members, have a total of 8 non-executive members.

Osman Duman, Tolga Sönmez and Melih Rüçhan Arvasi have declared that they (in person, spouses or relatives to the third degree) have not been involved with any subsidiary or Group company under İhlas Media Holding in any position where they have a direct or indirect interest. They have also declared that they have not taken part in the independent auditing process in the past five years.

Among the Independent Board Members, Osman Duman, Tolga Sönmez and Melih Rüçhan Arvasi submitted their statements of independence on January 02, 2011 as required by the Communiqué Serial: IV, No: 56 on Principles Regarding Determination and Application of Corporate Governance Principles (date of official gazette: 30.12.2011).

STATEMENT OF INDEPENDENCEI declare that: I do not have any direct or indirect relationship of interest in terms of employment, capital or trade and commerce between İhlas Media Holding (the Company), its subsidiaries, affiliates or any other group company and myself, my spouse and my blood or affinity relatives to the third degree within the last five years, I have not been previously elected to the Board of Directors as a representative of a certain group of shareholders, I have not been employed in a company, primarily for the audit and consultancy firm, which undertakes full or partial activity or organization of the company under contract and have not held a managerial position therein within the last five years, I have not been previously employed by the external auditor of the company, nor have I been included in the external audit process within the last five years, I have not been previously employed by any firm providing significant amounts of services and products to the company, and I have not held a managerial position therein within the last five years, On behalf of my spouse or any of my relatives by blood and affinity up to the third degree, I do not hold a managerial position nor am I a shareholder holding more than 5% of the total capital or the controlling shareholder by any means, nor do I hold a managerial position, nor am I effective in the control of the company, I possess adequate education, information and experience to duly perform the duties that I will assume as an independent Member of the Board of Directors in the Company, and I will allocate time for the Company to the extent that I can follow the process of the activities of the Company and I can completely fulfill the requirements of my duties, I possess strong ethical standards, professional prestige and experience, so that I can positively contribute to the activities of the Company, I can maintain my objectivity in conflicts of interest of the shareholders of the Company, make independent decisions by taking the rights of the stakeholders into consideration, and I am currently resident in Turkey, and I am independent within the frame of the criteria stated in the legislations, contracts and Corporate Governance Principles issued by the Capital Markets Board.Melih Rüçhan Arvasi

STATEMENT OF INDEPENDENCEI declare that: I do not have any direct or indirect relationship of interest in terms of employment, capital or trade and commerce between İhlas Media Holding (the Company), its subsidiaries, affiliates or any other group company and myself, my spouse and my blood or affinity relatives to the third degree within the last five years, I have not been previously elected to the Board of Directors as a representative of a certain group of shareholders, I have not been employed in a company, primarily for the audit and consultancy firm, which undertakes full or partial activity or organization of the company under contract and have not held a managerial position therein within the last five years, I have not been previously employed by the external auditor of the company, nor have I been included in the external audit process within the last five years, I have not been previously employed by any firm providing significant amounts of services and products to the company, and I have not held a managerial position therein within the last five years, On behalf of my spouse or any of my relatives by blood and affinity up to the third degree, I do not hold a managerial position nor am I a shareholder holding more than 5% of the total capital or the controlling shareholder by any means, nor do I hold a managerial position, nor am I effective in the control of the company, I possess adequate education, information and experience to duly perform the duties that I will assume as an independent Member of the Board of Directors in the Company, and I will allocate time for the Company to the extent that I can follow the process of the activities of the Company and I can completely fulfill the requirements of my duties, I possess strong ethical standards, professional prestige and experience, so that I can positively contribute to the activities of the Company, I can maintain my objectivity in conflicts of interest of the shareholders of the Company, make independent decisions by taking the rights of the stakeholders into consideration, and I am currently resident in Turkey, and I am independent within the frame of the criteria stated in the legislations, contracts and Corporate Governance Principles issued by the Capital Markets Board.Osman Duman




STATEMENT OF INDEPENDENCEI declare that: I do not have any direct or indirect relationship of interest in terms of employment, capital or trade and commerce between İhlas Media Holding (the Company), its subsidiaries, affiliates or any other group company and myself, my spouse and my blood or affinity relatives to the third degree within the last five years, I have not been previously elected to the Board of Directors as a representative of a certain group of shareholders, I have not been employed in a company, primarily for the audit and consultancy firm, which undertakes full or partial activity or organization of the company under contract and have not held a managerial position therein within the last five years, I have not been previously employed by the external auditor of the company, nor have I been included in the external audit process within the last five years, I have not been previously employed by any firm providing significant amounts of services and products to the company, and I have not held a managerial position therein within the last five years, On behalf of my spouse or any of my relatives by blood and affinity up to the third degree, I do not hold a managerial position nor am I a shareholder holding more than 5% of the total capital or the controlling shareholder by any means, nor do I hold a managerial position, nor am I effective in the control of the company, I possess adequate education, information and experience to duly perform the duties that I will assume as an independent Member of the Board of Directors in the Company, and I will allocate time for the Company to the extent that I can follow the process of the activities of the Company and I can completely fulfill the requirements of my duties, I possess strong ethical standards, professional prestige and experience, so that I can positively contribute to the activities of the Company, I can maintain my objectivity in conflicts of interest of the shareholders of the Company, make independent decisions by taking the rights of the stakeholders into consideration, and I am currently resident in Turkey, and I am independent within the frame of the criteria stated in the legislations, contracts and Corporate Governance Principles issued by the Capital Markets Board.Tolga Sönmez

19. Qualifications of Board Members

In principle, candidates for the Membership of the Board are chosen among those with a high level of knowledge and skill, qualified and with a certain experience. Those who have committed any crime against Capital Markets Law, insurance laws, banking laws, money laundering laws and laws on loans and / or those who have served more than five years incarceration, apart from convictions on negligence, may not become Member of the Board. Also, those who have been sentenced to penal service for debt fraud, extortion, bribe, theft, fraud, forgery of legal documents, abuse of trust for service, fraudulent bankruptcy, conspiracy to fix tenders and purchasing, revealing state secrets, and fiscal evasion through counterfeit. Those, going five years back from the date that they are chosen to the Board, convicted of one of the above crimes, must immediately resign from their duty and they cannot be re-elected in the following five years.

A Board Member is chosen from among qualified people with knowledge about the Company’s field of activity and with experience gained through working in the public or private sector.

Besides the general characteristics described above, the minimum requirements sought in a candidate for Board Membership candidacy are as follows:

a- Being able to read and analyze financial tables,b- Having fundamental information of the legal regulations that daily and long-term activities of the Company are subject to,c- Possessing the capacity and determination to attend all meetings of the Board that are planned to be held within the related accounting year.Although minimum qualities required from board members are not specified in the Articles of Association, conventionally: As stated in the CMB Corporate Governance Principles, board members should possess a high level of knowledge and skills, be qualified for the position, possess the appropriate experience and background, have no previous financial criminal convictions, be knowledgeable about the company's fields of activity and management and preferably hold university degrees. All board members have these minimum qualifications.

20. The Company's Mission, Vision and Strategic Goals

Our Mission• To care about social peace, popular benefit and peace of mind in all services we offer,• To be in a working tempo regardless of time and limits.

Our Vision• To be confidential and preferable in every kind of visual and written media,• To spread our sense of peace to the whole world,• To provide fastest and most efficient content (news, entertainment, information) to the whole world,• To provide candid and correct publishing in line with our editorial principles.

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Our Values• The best kinds of people are those who provide good service,• Earning people's trust precedes earning their money,• Individuals cannot live in peace and prosperity without a strong state,• A management style open to change, to bring the company in line with corporate qualities fitting for the global economy, strong infrastructure and human resources unique to our Group.

Our Strategy• To employ the latest technology in the most effective way,• To seek the most effective ways to access customers,• To produce the most up-to-date and effective content,• To use resources efficiently and productively,• To benefit from the social knowledge and sector experience of advanced countries and to learn from their mistakes,• To develop content and products which meets the needs of all individuals of society (women, children, elderly, etc.,)• To be accessible at all times in all places,

The Board of Directors periodically and regularly perform an overview of the extent to which targets have been met, operations and past performance. Work is underway to reflect this on performance following objective criteria.

21. Risk Management and Internal Control Mechanism

Necessary steps for the functioning of risk management and internal auditing mechanisms have been taken and an Internal Audit Unit will be established. Online data production and continuous monitoring of the whole system form the bases of the internal audit mechanism. It is planned to make periodical observations in order to determine risks before they occur as part of a dynamic risk management approach. The necessary measures are taken in order to carry out these activities by the Committee for Early Risk Detection, which is planned to be formed within the body of the Board of Directors.

22. Authorities and Responsibilities of the Board Members and Company Executives

The authorities and responsibilities of the Board Members and Company Executives are identified through laws and regulations, rules of ethics, and Company procedures. No provisions are included in the Company’s Articles of Association in this respect.

The responsibility for the administration and representation of the Company lies with the Board of Directors. All documents to be submitted and all agreements to be made by the Company shall only be legally sufficient under the official corporate name and signed by a person authorized to bind the Company. The responsibility for the administration and representation of the Company lies with the Board of Directors. Ahmet Mücahid Ören with his several and individual signature; and any two of Mustafa R. Selçuk, Nuh Albayrak, Fevzi Kahraman, Rıdvan Büyükçelik, Orhan Tanışman and Financial Affairs Manager Mustafa Erdoğan with their joint signatures are authorized to represent and bind the Company.

The Board of Directors elects a President from among its members, and a Deputy Chairman to stand in for him in his absence. The Board of Directors reserves the right to establish as many committees or commissions as needed from its members to overview the process of operations, to make the Financial Statements, in addition to observing the implementation of decisions taken. If required by the Company operations, Members of the Board of Directors may select Executive Members or Members and assign them a portion of the related works. The Board of Directors may also represent and bind the Company by appointing managers. Company executives perform their duties correctly and transparently, and are accountable and responsible for their performance. Executives comply with laws and regulations, the Company’s Articles of Association, and Company rules and policies in the performance of their duties, and inform the Board of Directors accordingly.The Board of Directors keeps the necessary books, issues the Financial Statements of the determined business year in accordance with the provisions of law, and presents the Financial Statements for review by the shareholders at least 21 days prior to the Annual General Assembly.

Aside from the Financial Statements, the Board of Directors issues a report at the end of each year which shows the Company's commercial, financial and economic status in addition to a summary of the business and operations performed. In the report, the Board of Directors also prepares a proposal regarding the determination of the amount of earnings to be distributed, as well as the amount that constitutes the reserve fund, and presents this report and proposal to the General Assembly. The report and the proposal documents are respectfully submitted for review by the shareholders at least twenty-one days before the Annual General Assembly.

The members of the Board of Directors perform the necessary operations to ensure compliance with Corporate Management Principles that already are or will be published by the Capital Markets Board. The authorities and responsibilities of the Board Members and Company executives are not defined in the Articles of the Association but identified through laws and regulations, rules of ethics, and Company procedures.




23. Principles for the Activities of the Board of Directors

• The agenda for the Board of Directors meeting is identified upon the requests of Company management and committees; with the request made by managers for a meeting in situations where a Board of Directors resolution is required for Company operations, and whenever required by current events during the concerned period. The Board of Directors convenes at least once each month.• The Board of Directors Secretariat is authorized to organize and announce the Board of Directors’ meeting agenda and serve notices for the call to meetings; to inform the Board of Directors members and to draw up all documents related to the Board of Directors. Sırrı Söztutan acts as the Secretary for the Board of Directors. Board members are invited to attend meetings by the Board of Directors Secretariat via e-mail or telephone, informing Board members of the venue, date and time of the meeting.• Members of the Board held 18 meetings as of December 2011, with an 89% participation rate in each meeting.• There was no objection which was required to be recorded as of the end of December 2011. No opposing votes were submitted by Independent Members during the same period.• Personal participation of the Members of the Board of Directors is ensured at all of the Board of Directors meetings.• Questions forwarded at the meetings are not recorded.• Members of the Board of Directors members are not entitled to preferential votes and / or veto rights.

24. Prohibition of Transactions and Competition with the Company

Prohibition for transactions with the Company was not applied to Board of Directors members at the end of December 2011 and yet no resulting conflict of interest occurred concerning this policy.

25. Rules of Ethics

The following rules of ethics have been developed by the Board of Directors for the Company and its employees. These rules of ethics have been announced to Company employees and publicized on the website in accordance with the Company’s Information Policy.

Our Board of Directors;Believe that the capital markets are, first and foremost, based on trust and therefore rules of ethics are of high importance, and on top these rules of ethics lie the supremacy of the law and the defense of this supremacy. The Company’s General Manager, the Chief Financial Officer and Accounting Finance Executives are assumed to:

• draw up complete, fair, true, timely and understandable disclosures in all reports and documentation publicized or submitted to the authorities of the capital market where the Company is a member thereof;• comply with all the laws, regulations and principles binding the Company individually and the Company’s relations with its shareholders;• ensure compliance with the essence as well as the letter of these rules of ethics; and to expend effort to promote the development of Company culture which forms the basis of compliance with laws and company policies in all activities.

In addition to these,Individuals within the Company who are in a position to possess knowledge regarding the financial statements, which nevertheless is not yet public, are expected to keep such information confidential in accordance with the rules of ethics.

Our employees:• are honest and reliable people who give due care to, and make no compromise on ethical and moral values;.• perform their duties in their units or departments for the benefit of the Company zealously and objectively in a disciplined and careful manner, in compliance with the principles of confidentiality;• fulfill their duties in the best possible manner to enhance the Company’s profitability and market share;• are always reasonable and considerate in their language, manners and the way they are attired;• are aware of the significance of proper relations between subordinates - top management and customers in business life, and organize themselves accordingly;• have a positive impact on the people they address both within and outside the Company with their respectful, moderate, modest, active and positive attitudes;• meticulously comply with the laws, professional principles and the concerned regulations;• take the most effective, sound and appropriate decisions for the Company by evaluating different ideas, perspectives and suggestions with a conciliatory attitude;• refrain from political, religious, ethnic arguments involving discrimination; and all unlawful activities;• possess the knowledge and experience that the job they are performing requires, and demonstrate continuous effort to develop their general knowledge, professional knowledge and skills. Employees should fulfill their responsibilities in the best possible manner with all these qualifications and values.

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26. Number, Structure and Independence of the Committees established by the Board of Directors

An Audit Committee and a Corporate Governance Committee have been set up in line with the Company principles. Each committee comprises of two people.

Distribution and qualifications of committee members are as follows:

Audit Committee Chairman Osman Duman (Professional Manager; Independent Member)Audit Committee Member Tolga Sönmez (Professional Manager; Independent Member)Corporate Management Committee Chairman Orhan Tanışman (Professional Manager)Corporate Management Committee Member Melih Rüçhan Arvasi (Professional Manager; Independent Member)

The procedure to be followed in the performance of Committee activities is designated as: “Committees act within the scope of their authorities and responsibilities and make recommendations to the Board of Directors. The final decision however, lies with the Board of Directors.” The audit committee held four meetings and the corporate governance committee held two meetings during the 2011 operating year. All the recommendations of these committees have been adopted by the Board of Directors.

27. Financial Benefits for the Board of Directors

• No payments are made to the members of the Board of Directors other than the rights and benefits designated by the General Assembly. Remunerations are paid to executive Board of Directors members however, for their executive duties.• No performance based payment method exists which reflects performance within the Company.• The Company does not extend loans or make available credits to members of the Board of Directors and Company managers.• No credits have been made available under the name of personal credit via the mediation of third persons, and no guarantees have been given such as surety in favor.

g) Conducted research and development studies:We have not performed any research and development studies.

ğ) Amendment(s) made to the articles of incorporation during the period and their reasons:No amendments have been made to the Articles of Association during the period.

h) Type and amount of issued capital market instruments, if any:None.

ı) Information regarding the sector in which the enterprise operates and its position in the sector: The Group is composed of the Holding and its subsidiaries.

İhlas Media Holding is involved in the fields of print, audio and video broadcasting, advertising, news agency activities and in other related sectors. The Holding takes the necessary steps in order to enhance its achievements in its areas of activity, ensure its regularity, retrench the fiscal burdens of the companies it founded or joined by arranging common service areas, and boost productivity in these companies by means of advanced organization techniques.

One of the group companies, İhlas Journalism is engaged in the following fields of activity: publishing and printing newspapers (including Türkiye Newspaper), magazines, books, encyclopedias, pamphlets and journals that are daily, weekly, monthly, shorter-term, longer-term or of uncertain frequency, in Turkish and in foreign languages, in addition to domestic and international distribution and marketing of these products. İhlas Gazetecilik owns six printing facilities, located in Istanbul, Ankara, Antalya, Izmir, Adana and Trabzon.

İhlas News Agency (İHA) is engaged in the news agency business. The company's main fields of activity consist of generating visual, written and photographic news, in addition to marketing this news via satellite and other means.

The main fields of activity of one of the Group companies, TGRT News TV, consist of production of television and radio broadcasts, production, shooting and vocalization of television films, as well as video and advertising programs, rental of television channels and establishment of radio stations. TGRT FM is engaged in radio broadcasting and operates under the legal entity, TGRT News TV.The main fields of activity of one of the Group companies, TGRT Digital TV, consist of production of television and radio broadcasts, broadcasts of documentaries, production, shooting and vocalization of television films, as well as video and advertising programs.

The fields of activity of İhlas Development (İhlas Gelişim) consist of the domestic and international sales, distribution and marketing of newspapers and all kinds of other publications, both in Turkish and in foreign languages. İhlas Gelişim is also the main partner of İhlas Fair Services and Communications Magazine.




Communications Magazine (İletişim Magazin) is engaged in the issuing, printing and marketing of magazines, newspapers, books, etc. The company produces 24 publications including 3 children's magazines, 7 magazines on textiles and interior decoration, 2 magazines on food culture and women, 1 automotive magazine, 1 magazine on information technologies, 4 magazines on buildings and construction, 1 health magazine, 3 magazines on digital printing, print houses, paper and office systems, 1 magazine on entertainment, and 1 newspaper in English.

İhlas Fair Services is engaged in organizing trade and promotion purpose fairs and exhibitions, and serving as travel agencies both domestically and internationally.

Alternatif Media is engaged in generating and producing software products for all kinds of audio, video and images, in addition to creating platforms over the internet, and providing data archive services, as well as selling or renting these services and publishing them on the Internet.

The fields of activity of İhlas Media Planning and Buying (former title: İhlas Advertisement Agency Services)(İhlas Media) consist of advertising, publicity, photography and billboards, in addition to the company's duties as an advertising agency.

The fields of activity of Promaş Professional Media Advertisement and Film Marketing Services, consist of advertising, publicity, photography and billboards, in addition to the company's duties as an advertising agency.

İhlas Communication Services has obtained the MVNO (Mobile Virtual Network Operator) license from the Information Technologies Authority and it provides MVNO services through its own brand VipCell.

Emlak Pazarlama İnşaat Proje Yönetimi ve Ticaret A.Ş. transferred the rights and liabilities, which are set forth in the contract it signed with respect to the construction project (BİZİMEVLER - 3) titled “Istanbul, Bahçeşehir, Ispartakule, Region 2, Section 1, Block 548, Parcel 1 distribution of income after the provision of sale of land”, to İhlas Holding - İhlas Media Holding - İhlas Marketing Joint Venture. This project includes a residential construction site with an area of 120,170 m2. The project, consisting of 680 residences and 1 office space, is completed as of 31.12.2011, and the 438 houses were transferred to the owners together with invoices.

j) Developments in investments and incentives and, if incentives were received, at what level:Our Company received no incentives. k) The prices of goods and services subject to activity, turnover, sale conditions and developments in all these areas during the year; developments regarding efficiency and productivity measures; reasons for any significant changes in these measures when compared to previous years:

a) Information on departments prepared on the basis of departmental activity is as follows:

Period: January 1 - December 31, 2011; Newsprinting and News TV Fair and Advertising In Group Group Printing Works Agency Services Magazine Agency Other Eliminations TotalSales Revenue (Net) 80,268,189 28,164,329 21,616,444 9,408,956 25,536,046 672,782 (12,526,210) 153,140,536Cost of Sales (-) (71,763,395) (25,615,337) (15,734,277) (5,630,233) (25,241,154) (329,297) 10,359,970 (133,953,723)Gross Profit / Loss 8,504,794 2,548,992 5,882,167 3,778,723 294,892 343,485 (2,166,240) 19,186,813Operating Expenses (-) (14,647,587) (4,670,320) (8,917,323) (3,711,481) (131,705) (3,608,471) 2,642,013 (33,044,874)Income and Profitfrom Other Operations 2,546,681 239,612 491,299 197,776 33,393 1,653,700 (475,773) 4,686,688Expenses and Losses from Other Operations (-) (732,599) (615,187) (747,218) (583,416) (81,053) (130,751) - (2,890,224)Operating Profit / Loss (4,328,711) (2,496,903) (3,291,075) (318,398) 115,527 (1,742,037) - (12,061,597)Shares in Profits / Losses of Investments Valued withthe Equity Method - - - - - 8,902,946 - 8,902,946Financing Revenues / (Expenses), Net 5,725,056 58,815 (105,250) 97,630 31,622 1,461,033 7,268,906Profit / Loss Befor e Taxof Continuing Operations 1,396,345 (2,438,088) (3,396,325) (220,768) 147,149 8,621,942 - 4,110,255 Total Assets 245,889,237 22,825,893 11,269,511 5,293,372 5,143,032 66,308,225 (12,935,040) 343,794,230 Total Liabilities 37,521,523 12,085,475 10,946,115 3,353,844 2,395,820 10,273,256 (12,935,040) 63,640,993

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Period: January 1 - December 31, 2010;

Newsprinting and News TV Fair and Other (*) In Group Group Printing Works Agency Services Magazine Eliminations TotalSales Revenue (Net) 70,398,199 24,762,318 8,082,047 7,977,238 1,774,182 (2,391,524) 110,602,460Cost of Sales (-) (58,514,495) (22,124,353) (4,450,932) (4,988,607) (456,449) 832,346 (89,702,490)Gross Profit / Loss 11,883,704 2,637,965 3,631,115 2,988,631 1,317,733 (1,559,178) 20,899,970Income and Profit from Other Operations 6,928,297 925,194 306,846 200,250 1,580,183 (133,580) 9.807,190Expenses and Losses from Other Operations (-) (288,940) (165,681) (892) (63,227) (2,288,256) 22,164 (2,784,832)Operating Profit / Loss 1,419,254 1,048,867 231,446 401,435 (3,439,372) - (338,370)Shares in Profits / Losses of Investments Valued with the Equity Method - - - - (50,070) - (50,070)Financing Revenues / (Expenses), Net 5,983,343 (199,887) (530,214) (26,383) 1,222,957 - 6,449,816Profit / Loss Before Tax ofContinuing Operations 7,402,597 848,980 (298,768) 375,052 (2,266,485) - 6,061,376 Total Assets 244,714,880 21,678,543 8,275,551 4,713,191 68,640,772 (5,514,629) 342,508,308 Total Liabilities 37,224,542 11,080,855 5,748,595 2,420,852 16,740,983 (5,514,629) 67,701,198

l) Basic ratios related to financial status, profitability and solvency, calculated based on financial statements and information prepared within the framework of this Communiqué’s provisions:

Balance Sheet 31.12.2011 Ratio Analysis 31.12.2010 Ratio AnalysisCurrent Assets 111,597,159 32.46% 117,760,317 34.38%Fixed Assets 232,197,071 67.54% 224,747,991 65.62%TOTAL ASSETS 343,794,230 100.00% 342,508,308 100.00%Short-Term Liabilities 27,879,473 8.11% 33,905,925 9.90%Long-Term Liabilities 35,761,520 10.40% 33,795,273 9.87%SHAREHOLDERS EQUITY 280,153,237 81.49% 274,807,110 80.23%Equities Pertaining to the Parent Company 181,550,340 52.81% 176,557,619 51.55%Minority Shares 98,602,897 28.68% 98,249,491 28.69%TOTAL RESOURCES 343,794,230 100.00% 342,508,308 100.00%

Income Statement 31.12.2011 Ratio Analysis 31.12.2010 Ratio AnalysisSales Revenue 153,140,536 100.00% 110,602,460 100.00%Cost of Sales (-) (133,953,723) -87.47% (89,702,490) -81.10%GROSS PROFIT / LOSS 19,186,813 12.53% 20,899,970 18.90%Operating Costs (33,44,874) -21.58% (28,260,698) -25.55%Other Operating Revenues 4,686,688 3.06% 9,807,190 8.87%Other Operating Costs (-) (2,890,224) -1.89% (2,784,832) -2.52%GROSS PROFIT / LOSS (12,061,597) -7.88% (338,370) -0.31%

Tax Income / Costs for Continuing Operations (183,787) -0.12% (1,641,389) -1.48%PROFIT/LOSS BEFORE TAX FOR CONTINUING OPERATIONS 4,110,255 2.68% 6,061,376 5.48%CEASED OPERATIONS Profit / Loss After Tax on Ceased Operations 0 0.00% 0 0.00%PROFIT / LOSS FOR THE PERIOD 3,926,468 2.56% 4,419,987 4.00%Breakdown of the Profit / Loss for the Period Minority Shares (1,065,500) -0.70% 3,071,531 2.78%Parent Company Shares 4,991,968 3.26% 1,348,456 1.22%




Ratios 31.12.2011 31.12.2010Liquidity Ratios Current Ratio 4.00 3.47 Liquidity Ratio 3.74 3.27 Cash Ratio 0.36 0.86 Financial Structure Ratios Financial Leverage 0.19 0.20 Total Liabilities / Shareholders Equity 0.23 0.25 Short-Term Loans / Total Resources 0.08 0.10 Long-Term Loans / Total Resources 0.10 0.10 Financial Debts / Shareholders Equity 0.03 0.02 Financial Debts / Total Assets 0.02 0.02

m) Measures thought to be taken in order to improve the Enterprise’s financial structure: The Enterprise’s financial structure is planned to be improved further by converting its short-term financial debts into long-term debts within the framework of the current economic conditions.

n) Changes to the senior management during the year and names, surnames and professional experience of those still serving:There was no change in the senior management during the year. Those serving in their positions are listed as follows: ProfessionalName, Surname Duty ExperienceAhmet Mücahid Ören Chairman of the Board 22 yearsMustafa R. Selçuk Deputy Chairman of the Board, General Manager and Executive Manager 18 yearsNuh Albayrak Member of the Board 32 yearsFevzi Kahraman Member of the Board 37 yearsRıdvan Büyükçelik Member of the Board 29 yearsOrhan Tanışman Member of the Board and Corporate Management Committee Chairman 20 yearsMelih Rüçhan Arvasi Member of the Board and Corporate Management Committee Member (Independent Member) 18 yearsOsman Duman Member of the Board and Audit Committee Chairman (Independent Member) 18 yearsTolga Sönmez Member of the Board and Audit Committee Member (Independent Member) 14 yearsMustafa Erdoğan Financial Affairs Manager 22 years

o) Personnel and employee actions, collective agreements, and rights and benefits provided to the personnel and employees: The number of employees at İhlas Yayın Holding A.Ş. stood at 19 in the beginning of the period, falling to 23 by the end of the period. A total of 1.121 personnel are working in companies included in the consolidation. No collective agreements are made in our Company.

Personnel expenses included in operating costs in the parent capital within the period stood at TL 9,076,387.

In addition to salaries, food (lunch) and transportation are provided for personnel.

ö) Information on donations made during the period: No donation was made during the period 01.01.2011 - 31.12.2011.

p) Information on whether there are organizations other than the registered office:We have no off-center organization.

r) Information on the shares of enterprises subject to the consolidation within the parent capital (mutual association):There is no mutual subsidiary among the consolidated companies.

s) In relation to the process of preparing the consolidated financial statements, explanations regarding the main components of the Group’s internal audit and risk management systems:

The Group’s internal control system includes a structure in which goals of the enterprise, risk determination and control activities are associated with each other. Moreover, the Group focuses on the minimization of any kinds of risks which will prevent it from reaching its goals. Components of the internal control system established for this purpose are grouped under three categories.

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1- Control EnvironmentManagement’s views and approach,Structure of the organization of the Enterprise,Functions of the Board of Directors and Board of AuditorsDistribution of rights and responsibilities,Management’s control methods,Enterprise’s personnel policies, procedures, personnel structure and status,External factors.

2- Accounting SystemEnterprise’s accounting system and structure,Whether or not registered transactions do actually exist,Whether or not transactions are performed based on granted authorization,Whether or not realized transactions are registered,Whether or not transactions are appropriately evaluated,Whether or not transactions are registered to the correct accounts,Whether or not transactions are registered on time,Whether or not transactions are reflected to the statements and report as required,Whether or not there is or not an account plan which is established in accordance with the Enterprise’s operations,Whether or not there is an accounting regulation which sufficiently sets forth the operation of accounts, an effective budget system and a cost accounting system arranged in accordance with operations, a document flow order that keeps transactions under control.

3- Control ProceduresThe separation of principle duties,Appropriate authorization in relation with transactions and operations,Convenience of documents and registry entries,Physical control on assets and registry entries,Independent controls regarding performance.The Group’s internal audit structure is audited by internal auditors under the supervision of the Internal Audit Committee.

A risk assessment process is in place to determine and evaluate any obstacles that may prevent the Group from achieving its purpose during the execution of internal audits.

Elements of the risk assessment process are as follows:Determination of goals and targets,Determination of the risk tolerance level,Determination of controls,Evaluation of controls,Improvement of controls,Permanent monitoring.



İhlas Media Holding Annual Report 2011 65

At the Board of Directors meeting held today (May 4, 2012);

By the end of our Company's 2011 accounting period;

The profit for the period was TL 4,991,968.00 according to the consolidated balance sheet prepared according to International Accounting / Financial Reporting Standards, in compliance with the provisions of Communiqué - Serial: XI, No.: 29.

Our net profit for the period prepared in accordance with the unconsolidated Tax Procedure Law (T.P.L.) is TL 8,796,188.19 in our legal records.

However, it has been decided to make a suggestion to the Ordinary General Assembly not to distribute our 2011 profits and to set off the profits against previous period losses, since our loss for the previous periods prepared in accordance with the unconsolidated T.P.L. is TL 29,013,207.32 in our legal records.

Our above explanation, in compliance with the provisions of Communique - Serial VIII, No: 54, reflects exact and right information attained us on this subject / subjects; the information is appropriate with the books, records and our documents; we make all efforts to get the exact and right information about the subject and we announce that we are responsible for these explanations.

Respectfully yours,

Mustafa Ruşen Selçuk Mustafa Erdoğan Deputy Chairman, General Manager, Financial Affairs Managerand Executive Member


İhlas Yayın Holding A.Ş. Proposal on the Distribution of Profits for the Year 2011

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DATE : 20.03.2012

DATE OF THE BOARD OF DIRECTORS’ DECISION FOR THE FINANCIAL TABLES AND ANNUAL REPORTS: MARCH 20, 2012NUMBER OF DECISION : 2012/04

STATEMENT OF RESPONSIBILITY IN ACCORDANCE WITH THE 9TH ARTICLE OF CAPITAL MARKETS BOARD'S “COMMUNIQUÉ ON THE PRINCIPLES OF FINANCIAL REPORTING IN CAPITAL MARKETS”, SERIAL: XI, NO.: 29

We declare that the consolidated financial statements and the Annual Report of İhlas Yayın Holding A.Ş., which were completed by December 31, 2011, in accordance with the International Accounting / Financial Reporting Standards pursuant to the provisions of the Capital Markets Board's “Communiqué on the Principles of Financial Reporting in Capital Markets”, Serial: XI, No.: 29,

a) Were examined by our side; b) Did not include any explanation contrary to the facts in respect to important matters or any gaps that could be misleading as of the date when the explanation was made, to the extent of the information we have as per our duty and responsibility within the Enterprise; and c) To the extent of the information we have as per our duty and responsibility within the Enterprise, financial statements along with those under the scope of consolidation, which were prepared in accordance with the financial reporting standards in effect, truly reflect the Enterprise’s assets, liabilities, financial status and profit / loss; and the Annual Report solely reflects the truth regarding the development and performance of the business; and the Annual Report, along with those under the scope of consolidation, reflects the truth regarding the Enterprise’s financial status, significant risks and uncertainties it faces.

Yours faithfully,

Mustafa Ruşen Selçuk Mustafa Erdoğan Deputy Chairman, General Manager, Financial Affairs Manager and Executive Member


İhlas Yayın Holding A.Ş. Statement of Responsibility


To the General Assembly of İhlas Yayın Holding A.Ş.

Company’s Name : İHLAS YAYIN HOLDİNG A.Ş.

Registered Office : Istanbul

Capital : Authorized Capital: 600,000,000.00 TL Issued Capital: 200,000,000.00 TL

Business Lines : Media, Publishing, Advertising

Auditors / Auditors' Name(s) : Mehmet Kürşat Karakebelioğlu Status of whether the auditors are shareholders Designated on September 13, 2010 for a term of three years.or personnel of the Company They are neither shareholders nor personnel. Number of Board of Directors meetings participated : Participation in 9 Board of Directors meetings, with a in and Audit Committee meetings held review of Board of Directors resolutions. Four Audit meetings held. Scope of the audit carried out in the Company’s : It was observed in the quarterly audits made on the statutory accounts Partnership accounts, scope of the audit books and books and records at the audit dates and in the carried out in the Company’s books and records, conclusion documents that the records were in compliance withdate of the audit and the result the documents and accounting standards. Number and results of cash audits made in : Apart from cash audits carried out in affiliated companies, four cashaccordance with sub-paragraph 3, paragraph 1, audits were carried out at the Head Office and it was observed thatArticle 353 of the TCC cash balances were in conformity with the records. Dates and results of audits carried out as per sub- : Company records were audited each month and it was observed that theparagraph 4, paragraph 1, Article 353 of the TCC cited assets existed and complied with records.

Complaints and information concerning : No complaints and information about embezzlementembezzlements, which were referred to us, were referred to us.and procedures followed (if any)

I have audited the accounts and transactions of İhlas Media Holding for the period of January 1, 2011 - December 31, 2011 in accordance with the Turkish Commercial Code, the Company’s Articles of Association, other laws and regulations and generally accepted accounting principles and standards.

It is my view that the appended balance sheet drawn up as per December 31, 2011, the contents of which are recognized by me, and the Income Statement for the period January 1, 2011 - December 31, 2011, truly and accurately reflect the Company’s financial situation as per the above date and the operating results as per the above period respectively, and that the recommendation for the distribution of profits complies with the laws and the Company’s Articles of Association.

I submit the approval of the Balance Sheet and Income Statement, and the discharge of the Board of Directors for your examination.

Istanbul,

AuditorMehmet Kürşat Karakebelioğlu


Audit report abstract for the accounting year 2011

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İHLAS YAYIN HOLDİNG ANONİM ŞİRKETİ

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT FOR THE ACCOUNTING YEAR JANUARY 1 - DECEMBER 31, 2011

İhlas Yayın Holding Anonim ŞirketiIndependent Auditor's Reportfor the Accounting Year January 01 - December 31, 2011

To the Board of Directors of İhlas Yayın Holding Anonim Şirketi,We have audited the accompanying consolidated financial statements (balance sheet) of İhlas Yayın Holding Anonim Şirketi (“the Holding”), applicable for December 31, 2011, and the related comprehensive statements of income, changes in shareholders' equity and cash flows and footnotes to these statements applicable for the same year ending.

The Responsibilities of the Group Management in Relation to the Financial StatementsThe management of the Group is responsible for the preparation and correct disclosure of the consolidated financial tables in accordance with the financial reporting standards announced by the Capital Markets Board (CMB). This responsibility incorporates the preparation of consolidated financial tables in a manner free from any material errors which may stem from mistakes and / or deceptions and irregularities, the design, application and maintenance of internal auditing systems to enable a fair representation of the state of the company, the establishment of accounting projections proper for relevant conditions and the determination of proper accounting policies.

The Responsibility of the Independent Audit CompanyOur responsibility is to release a view on these consolidated financial tables based on the results of our independent auditing. Our independent audit was carried out in accordance with independent auditing standards set out by the Capital Markets Board. These standards require compliance with ethical standards and the completion of an independent audit to provide sufficient confidence in the ability of the consolidated financial statements to present an accurate reflection of the state of the Holding.

Our independent audit incorporates the use of independent audit techniques in order to provide an independent audit of the consolidated financial tables and footnotes. We were responsible for the determination of the independent audit techniques, including the matter of whether there are any errors, which may stem from mistakes and / or deceptions and irregularities in the consolidated financial tables. The internal risk system of the Group was taken into consideration in this risk appraisal. However, our aim is not to disclose a view on the efficiency of the internal audit system, but to illustrate the relationship between financial tables prepared by the management and the internal audit system in order to develop independent techniques, which are proper for the relevant conditions. Our independent audit also incorporates the appraisal of the compatibility between accounting policies accepted by the Group management and accounting projections, and the presentation of consolidated financial tables as a whole.

We believe in that the independent audit results obtained through our internal audit are sufficient and proper to establish such a view.

OpinionIn our view, the enclosed consolidated financial statements truly and fairly reflect Group’s financial status as of December 31, 2011, as well as its financial performance and cash flows for the fiscal year ending on the same date, excluding the impact of matters described in the above Grounds for Qualified Opinion section, within the framework of financial reporting standards published by the Capital Markets Board.

ISTANBUL, March 20, 2012

Responsible Partner, Chief AuditorŞÜKRÜ YAVUZ

PÜR BAĞIMSIZ DENETİM YEMİNLİ MALİ MÜŞAVİRLİK A.Ş.

72

CONSOLIDATED FINANCIAL POSITION STATEMENTS (BALANCE SHEETS) 74

CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS 76

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY 78

CONSOLIDATED CASH FLOW STATEMENTS 79

FOOTNOTES TO THE FINANCIAL STATEMENTS

NOTE 1 ORGANIZATION AND LINE OF ACTIVITY OF THE GROUP 80

NOTE 2 PRINCIPLES REGARDING THE PRESENTATION OF FINANCIAL STATEMENTS 82

NOTE 3 ENTERPRISE MERGERS 99

NOTE 4 JOINT VENTURES 100

NOTE 5 REPORTING ON THE BASIS OF DEPARTMENT OF ACTIVITY 100

NOTE 6 CASH AND CASH EQUIVALENTS 101

NOTE 7 FINANCIAL INVESTMENTS 101

NOTE 8 FINANCIAL LIABILITIES 102

NOTE 9 OTHER FINANCIAL LIABILITIES 103

NOTE 10 TRADE RECEIVABLES AND PAYABLES 103

NOTE 11 OTHER RECEIVABLES AND PAYABLES 104

NOTE 12 RECEIVABLES AND PAYABLES RESULTING FROM FINANCIAL SECTOR OPERATIONS 104

NOTE 13 INVENTORIES 104

NOTE 14 BIOLOGICAL ASSETS 105

NOTE 15 BALANCES RELATED TO CONSTRUCTION CONTRACTS IN PROGRESS 105

NOTE 16 INVESTMENTS EVALUATED WITH THE EQUITY METHOD 105

NOTE 17 INVESTMENT PROPERTY 106

NOTE 18 TANGIBLE FIXED ASSETS 107

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NOTE 19 INTANGIBLE FIXED ASSETS 108

NOTE 20 GOODWILL 110

NOTE 21 GOVERNMENT GRANTS AND INCENTIVES 111

NOTE 22-23 PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, COMMITMENTS 112

NOTE 24 BENEFITS PROVIDED TO THE PERSONNEL 113

NOTE 25 PENSION PLANS 114

NOTE 26 OTHER ASSETS AND LIABILITIES 114

NOTE 27 SHAREHOLDERS’ EQUITY 115

NOTE 28 SALES REVENUES AND COSTS 117

NOTE 29 OPERATING COSTS 117

NOTE 30 QUALITATIVE DISTRIBUTION OF EXPENSES 117

NOTE 31 OTHER OPERATING INCOMES / EXPENSES 118

NOTE 32 FINANCIAL REVENUES 119

NOTE 33 FINANCIAL EXPENSES 119

NOTE 34 NON-CURRENT ASSETS HELD-FOR-SALE AND CEASED OPERATIONS 119

NOTE 35 TAX ASSETS AND LIABILITIES 119

NOTE 36 EARNINGS PER SHARE 122

NOTE 37 RELATED PARTY DISCLOSURES 123

NOTE 38 NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS 126

NOTE 39 FINANCIAL INSTRUMENTS 127

NOTE 40 SUBSEQUENT EVENTS (EVENTS AFTER THE BALANCE SHEET DATE) 132

NOTE 41 OTHER MATTERS THAT MAY AFFECT THE FINANCIAL STATEMENTS TO A SIGNIFICANT EXTENT OR

MATTERS WHICH ARE REQUIRED TO BE EXPLAINED IN ORDER FOR THE FINANCIAL STATEMENTS

TO BE CLEAR, INTERPRETABLE AND UNDERSTANDABLE 132

74

Independently Footnote Audited Audited References 31.12.2011 31.12.2010ASSETS Current Assets 111,597,159 117,760,317 Cash and Cash Equivalents 6 10,085,865 29,115,852 Financial Investments 7 - - Trade Receivables 10 69,589,337 65,613,151 - Trade Receivables from Related Parties 10 26,906,905 8,748,375 - Other Trade Receivables 10 42,682,432 56,864,776 Receivables from Finance Sector Operations 12 - - Other Receivables 11 450,909 928,787 Inventories 13 7,433,045 6,739,021 Live Assets 14 - - Other Current Assets 26 24,038,003 15,363,506 (Sub Total) 111,597,159 117,760,317 Fixed assets Held-for Sale 34 - -Fixed Assets 232,197,071 224,747,991 Trade Receivables 10 - - Receivables from Finance Sector Operations 12 - - Other Receivables 11 54,679 37,603 Financial Investments 7 - - Investment by Equity Method 16 9,097,876 44,930 Live Assets 14 - - Real Estate Held-for-investment 17 91,809,903 97,285,537 Tangible Assets 18 42,561,760 41,070,756 Intangible Assets 19 57,184,086 56,138,772 Goodwill 20 13,342,728 13,342,728 Deferred Tax Liabilities 35 17,574,536 16,696,405 Other Non-Current Assets 26 571,503 131,260TOTAL ASSETS 343,794,230 342,508,308

The accompanying footnotes form an integral part of the consolidated financial statements.


Consolidated Financial Position Statements (Balance Sheets)as of December 31, 2011 and December 31, 2010 (All amounts expressed in Turkish Lira (“TL”) unless mentioned otherwise.)



Independently Footnote Audited Audited References 31.12.2011 31.12.2010LIABILITIESShort-Term Liabilities 27,879,473 33,905,925 Financial Debts 8 3,796,722 3,238,050 Other Financial Liabilities 9 1,968,805 1,970,865 Trade Payables 10 12,362,485 20,377,625 - Trade Payables to Related Parties 10 1,277,491 7,474,753 - Other Trade Liabilities 10 11,084,994 12,902,872 Other Liabilities 11 1,908,815 1,765,139 Debts from Financial Sector Operations 12 - - Government Promotion and Aid 21 - - Tax Liability Profit for the Period 35 94,719 425,098 Provision of Debt 22 84,861 57,700 Other Short-Term Liabilities 26 7,663,066 6,071,448 (Sub Total) 27,879,473 33,905,925 Liabilities Related to Fixed Assets Held-for-sale 34 - -Long-Term Liabilities 35,761,520 33,795,273 Financial Debt 8 3,541,907 2,841,906 Other Financial Liabilities 9 - - Trade Payables 10 - - Other Liabilities 11 - Debts from Financial Sector Operations 12 - - Government Promotion and Aid 21 - - Provision of Debt 22 604,262 1,017,331 Allowances Related to Extended Benefit to Employees 24 9,528,218 8,106,846 Deferred Tax Liability 35 21,732,496 21,829,190 Other Long-Term Liabilities 26 354,637 -SHAREHOLDERS' EQUITY 280,153,237 274,807,110Shareholders’ Equity Belonging to Main Partnership 181,550,340 176,557,619 Paid-in Capital 27 200,000,000 200,000,000 Capital Correction Discrimination 27 22,039,497 22,039,497 Opposite Affiliate Capital Correction (-) - - Share Premiums 27 - - Value Increase Funds - - FX Conversion Differences - - Restricted Reserves Derived from Profit 27 6,950,444 6,949,691 Profit / Loss for the Previous Period 27 (52,431,569) (53,780,025) Net Profit / Loss for the Period 36 4,991,968 1,348,456Minority Interest 27 98,602,897 98,249,491TOTAL LIABILITIES 343,794,230 342,508,308

76

Independently Audited Audited Footnote 01.01.2011 - 01.01.2010 - References 31.12.2011 31.12.2010CONTINUING OPERATIONS Income from Sales 28 153,140,536 110,602,460Cost of Goods Sold (-) 28 (133,953,723) (89,702,490)Gross Profit / (Loss) from Trade Activities 19,186,813 20,899,970Interest, Fee, Premium, Commission and Other Income 28 - -Interest, Fee, Premium, Commission and Other Expenses (-) 28 - -Gross Profit / (Loss) from Financial Sector Activities - -GROSS PROFIT / (LOSS) 19,186,813 20,899,970Marketing Sales and Distribution Expenses (-) 29 (8,037,285) (7,311,042)General Administration Expenses (-) 29 (25,007,589) (20,949,656)Research and Development Expenses (-) 29 - -Other Operating Income 31 4,686,688 9,807,190Other Operating Expenses (-) 31 (2,890,224) (2,784,832)OPERATING PROFIT / (LOSS) (12,061,597) (338,370)Shares of Investments Evaluated by Equity Method in Profit / (Loss) 16 8,902,946 (50,070)Financial Income 32 14,716,456 12,799,109Financial Expenses (-) 33 (7,447,550) (6,349,293)PRE-TAX PROFIT / (LOSS) OF CONTINUING OPERATIONS 4,110,255 6,061,376Continuing Operations Tax Income / (Expenditure) (183,787) (1,641,389)- Tax Income / (Expenditure) of the Period 35 (1,158,612) (1,899,366)- Deferred Tax Income / (Expenditure) 35 974,825 257,977PROFIT / (LOSS) FOR THE PERIOD OF CONTINUING OPERATIONS 36 3,926,468 4,419,987CEASED OPERATIONS Profit / (Loss) After Tax of Ceased Operations 34 - -PROFIT / (LOSS) FOR THE PERIOD 3,926,468 4,419,987Distribution of Profit / (Loss) For the Period 3,926,468 4,419,987Minority Interest 36 (1,065,500) 3,071,531Shares of Main Partnership 36 4,991,968 1,348,456Earnings / (Loss) per Share 36 0.02 0.01Earnings / (Loss) per Share from Continuing Operations 36 0.02 0.01


Consolidated Comprehensive Income Statementsas of January 1 - December 31, 2011 and January 1 - December 31, 2010(All amounts expressed in Turkish Lira (“TL”) unless mentioned otherwise.)



Independently Audited Audited Footnote 01.01.2011 - 01.01.2010 - References 31.12.2011 31.12.2010PROFIT / LOSS FOR THE PERIOD 36 3,926,468 4,419,987 OTHER COMPREHENSIVE PROFIT Change in Financial Assets Value Increase Fund - -Change in Fixed Assets Value Increase Fund - -Change in the Fund of Protection from Financial Risk - -Change in Foreign Currency Conversion Difference - -Actuarial Gains and Loss in Pension Plans - -Shares of Partnerships, Valued with Equity Method, in Other Comprehensive Income - -Tax Income / Expenditure(s) Related with Other Comprehensive Income Items - - OTHER COMPREHENSIVE INCOME (AFTER TAX) - - TOTAL COMPREHENSIVE INCOME 3,926,468 4,419,987 Dıversification of Total Comprehensive Income 3,926,468 4,419,987Minority Interest 36 (1,065,500) 3,071,531Main Partneship Shares 36 4,991,968 1,348,456


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Independently Footnote Audited Audited References 31.12.2011 31.12.2010Cash flows from operating activities Net profit / (loss) for the period 36 4,991,968 1,348,456Mutual agreement between cash flows from operating activities and net profit Depreciation 17,18 5,899,396 8,871,277Amortization and depletion allowance 19 200,474 14,965Provisions for severance pay 24 2,705,665 4,535,455Tax 16 183,787 1,641,389Minority profit / (loss) 36 (1,065,500) 3,071,531Cancellation of brand impairment 31 - (4,249,860)Sales loss of subsidiary (public offering) 31 - 2,230,132Provision of law suit 31 431,792 132,400Shares of Investments Valued by Equity Method in Profit / (Loss) 16 (8,902,946) 50,070Provision for doubtful accounts out of subject 31 (341,409) (1,167,598)Provision of severance payments out of subject 31 (185,583) (396,725)Other provisions out of subject 31 (958,587) (813,320)Interest revenue 32 (2,994,489) (2,874,220)Interest expenditure 32 958,841 1,438,086Loss / (profit) on fixed assets sold, net 31 (470,232) (20,780)Other expenses / (income) not requiring cash (inflow) / outflow, net 425,428 548,526Net operating profit before changes in operating assets and liabilities 878,605 14,359,784Changes in assets and liabilities Changes in trade receivables 10 (3,976,186) 19,608,823Changes in other receivables 11 460,802 (668,106)Changes in inventories 13 (694,024) (3,259,057)Changes in other current assets 26 (8,674,497) 15,541,206Changes in other fixed assets 26 (440,243) 18,704,896Changes in trade payables 10 (8,015,140) (124,094)Changes in other debts 11 143,676 (190,928)Changes in other short and long-term debts 26 1,946,255 (864,119)Taxes paid 35 (1,488,991) (1,674,014)Paid severance pays 24 (1,098,710) (955,059)Net cash provided by operating activities (20,958,453) 60,479,332Investment activities Tangible fixed asset and held-for-investment real estate purchases 17,18 (8,943,764) (46,565,525)Intangible fixed assets purchases 19 (1,245,788) (2,100)Cash from fixed assets sales 7,430,757 308,924Cash outflows from subsidiary acquisition 20 - (9,610,780)Cash derived from subsidiary sales - 3,960,000Cash capital increase of subsidiary (external main partnership) 27 1,395,000 229,139Net cash derived from investment operations (1,363,795) (51,680,342)Financial operations: Interest received and paid, net 32,33 2,035,648 1,436,134Change in financial debts 8,9 1,256,613 77,738Net cash used in financial operations 3,292,261 1,513,872Net increase in cash and cash equivalents (19,029,987) 10,312,862Cash from merges of enterprises at the beginning of the period - 2,786,254Balance of cash and cash equivalents at the beginning of the period 6 29,115,852 16,016,736Balance of cash and cash equivalents at the end of the period 6 10,085,865 29,115,852


Consolidated Cash Flow Statementsas of January 1 - December 31, 2011 and January 1 - December 31, 2010 (All amounts expressed in Turkish Lira (“TL”) unless mentioned otherwise.)


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Note 1 - Organization and Line of Activity of the Group

İhlas Yayın Holding A.Ş.'s ("Holding") field of activity consists of participating or partaking in the capitals, management and controlling of all kinds of partnerships that are or will be established to operate in all kinds of written, audio and video broadcasting, advertising, news agency and other similar sectors as of their establishment or thereafter, in addition to establishing enterprises and companies in these sectors on the Holding's own behalf. The Holding's headquarters is located at the address: “29 Ekim Cad. No: 23 Yenibosna, Bahçelievler - Istanbul”.

The Holding's and its subsidiary companies' number of personnel as of the dates indicated below are as follows;

Periods Holding Subsidiary Companies Group Total31.12.2011 23 1,098 1,12131.12.2010 19 992 1,011

The Holding's partnership structure as of 31.12.2011 and 31.12.2010 is as follows:

31.12.2011 31.12.2010Name / Title Share ratio % Share Amount (TL) Share ratio % Share Amount (TL)İhlas Holding A.Ş. 69.15 138,300,000 69.15 138,300,000Free Float 28.75 57,500,000 28.75 57,500,000Enver Ören 1.00 2,000,000 1.00 2,000,000Ahmet Mücahid Ören 0.90 1,800,000 0.90 1,800,000Mahmut Kemal Aydın 0.10 200,000 0.10 200,000Other 0.10 200,000 0.10 200,000Total 100,00 200,000,000 100.00 200,000,000Distinction from Share Capital Adjustments 22,039,497 22,039,497Total 222,039,497 222,039,497

According to the General Assembly Decision regarding the amendment of the articles of association, dated 13.09.2010, the distribution of and the benefits provided by the Holding's preferential shares (group B shares) are as follows:

Partner's Name / Title Bearer / Registered Quantity Amountİhlas Holding A.Ş. Registered 8,000,000 8,000,000Enver Ören Registered 1,000,000 1,000,000Ahmet Mücahid Ören Registered 900,000 900,000Mahmut Kemal Aydın Registered 100,000 100,000Total 10,000,000 10,000,000

Benefits Provided from Preferential Shares

a- Regarding the prerogative of choosing a Member of the Board of Directors;If the General Assembly of the Holding decides that the Board of Directors consist of 5 people, at least 4 of the Members of the Board of Directors are selected from among candidates nominated by group (B) shareholders. Similarly, at least 5 of the members are selected among those candidates if a board of 7 people is decided, at least 7 of the members are selected among those candidates if a board of 9 people is decided, and at least 9 of the members are selected among those candidates if a board of 11 people is decided.

b- Regarding the prerogative of choosing a Comptroller;If the General Assembly decides the number of comptrollers as one, this comptroller is selected from among candidates nominated by group (B) shareholders. Similarly, at least two of the comptrollers are selected among those candidates if a comptroller number of three is decided upon.

c- Regarding the prerogative of voting at the General Assembly Meetings;In the ordinary and the extraordinary General Assembly Meetings of the Holding, each group B shareholder has 100 (one hundred) vote rights for each share they possess. The provisions of TCC’s article 387 are reserved.


Footnotes to the Consolidated Financial Statements as of December 31, 2011(The amounts are expressed in Turkish Lira ("TL"), unless otherwise indicated.)


The Group's Fields of Activity

The Group consists of the Holding and its subsidiary companies.

One of the group companies, İhlas Gazetecilik A.Ş. (İhlas Gazetecilik) is engaged in the following fields of activity: publishing and printing newspapers, magazines, books, encyclopedias, pamphlets and journals that are daily, weekly, monthly, shorter-term, longer-term or of uncertain frequency, in Turkish and in foreign languages, in addition to distribution and marketing of these products domestically and internationally. İhlas Gazetecilik owns six printing facilities, located in Istanbul, Ankara, Antalya, Izmir, Adana and Trabzon.

One of the Group companies, İhlas Haber Ajansı A.Ş. (İHA), is engaged in the news agency business. The Company's main fields of activity consist of generating visual, written and photographed news, in addition to marketing this news via satellite and other means.

The main fields of activity of one of the Group companies, TGRT Haber TV A.Ş. (TGRT Haber), consist of production of television and radio broadcasts, production, shooting and vocalization of television films, as well as video and advertising programs, rental of television channels and establishment of radio stations. TGRT FM, which has 5 studios consisting of one broadcasting, two recording and two montage studios, operates under the legal entity of TGRT News TV.

The main fields of activity of one of the Group companies, TGRT Dijital TV Hizmetleri A.Ş. (TGRT Dijital), consist of production of television and radio broadcasts, broadcasts of documentaries, production, shooting and vocalization of television films, as well as video and advertising programs.

One of the Group companies, Communications Magazine (İletişim Magazin), is engaged in the issuing, printing and marketing of magazines, newspapers, books, etc. The company produces the following publications: 3 children's magazines, 7 magazines on textiles and interior decoration, 2 magazines on food culture and women, 1 automotive magazine, 1 magazine on information technologies, 4 magazines on building and construction, 1 health magazine, 3 magazines on digital printing, print houses, paper and office systems, 1 magazine on entertainment, and 1 newspaper.

One of the Group companies, İhlas Fuar Hizmetleri A.Ş. (İhlas Fuar), is engaged in organizing trade and promotion purpose fairs and exhibitions, both domestically and internationally. The Company’s fields of activity also include providing advertising services within its sector and issuing periodical publications.

The fields of activity of one of the Group companies, İhlas Gelişim Yayıncılık A.Ş. (İhlas Gelişim), consist of the domestic and international selling, distribution and marketing of newspapers and all kinds of other publications, both in Turkish and in foreign languages. İhlas Gelişim is also the main partner of İhlas Fuar and İletişim Magazin.

One of the Group companies, Alternatif Media, is engaged in advertising, publicity, photography and billboards in addition to the company's duties as an advertising agency.

The fields of activity of one of the Group companies, Promaş Profesyonel Medya Reklam ve Film Pazarlama Hizmetleri A.Ş. (Promaş), consist of advertising, publicity, photography, show bills and other similar announcement media, in addition to the Company's duties as an advertising agency.

The fields of activity of one of the Group companies, İhlas Media Planning and Buying (former title: İhlas Advertising Agency Services) (İhlas Media) consist of advertising, publicity, photography and billboards in addition to the company's duties as an advertising agency.

Subsidiary Companies

The Holding's final stock share ratios with its subsidiary companies as of December 31, 2011, and December 31, 2010, are as follows:

Ownership Ratio % Ownership Ratio % Main Fields of Activity 31.12.2011 31.12.2010İhlas Gazetecilik A.Ş. (İhlas Gazetecilik) Issuing, distribution and marketing of 56.55% 56.55% Türkiye Gazetesi, as well as print and press related works İhlas Haber Ajansı A.Ş. (İHA)(*) News Agency 50.00% 50.00%TGRT Haber TV A.Ş. (TGRT Haber) Television broadcasting through TGRT 98.96% 98.96% Haber TV and radio broadcasting through TGRT FM TGRT Dijital TV Hizmetleri A.Ş. (TGRT Dijital) Television broadcasting through 95.00% 95.00% TGRT Belgesel TV

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İletişim Magazin Gazt. San ve Tic. A.Ş. Issuing, printing and marketing 79.80% 79.80%(İletişim Magazin) of magazines, newspapers, books etc İhlas Fuar Hizmetleri A.Ş. (İhlas Fuar) Organizing fairs and exhibitions in 77.28% 77.28% addition to issuing periodical publications on subjects related to the Company's fields of activity. İhlas Gelişim Yayıncılık A.Ş. (İhlas Gelişim) The Company is the main partner of 84.00% 84.00% İhlas Fuar Hizmetleri A.Ş. and İletişim Magazin Gazt. San ve Tic. A.Ş. Alternatif Medya Görsel İletişim Advertising, publicity, photography 93.13% 93,13%Sis. Ltd. Şti. (Alternatif Medya) and agency regarding show bills and other similar announcement media Promaş Profesyonel Medya Reklam ve Advertising, publicity, photography 96.80% 96.80%Film Pazarlama Hiz. A.Ş. (Promaş) and agency regarding show bills and other similar announcement media İhlas Medya Planlama ve Satınalma Hiz. Ltd. Şti. Advertising, publicity, photography 99.00% 99.00%(Eski Unvanı: İhlas Reklam Ajans and agency regarding show bills andHizmetleri Ltd. Şti.) (İhlas Medya) other similar announcement media

(*) The Group's active share ratio in the Company is 50%. The Group actively holds the authority and power to control the financial and operating policies of the Company in question, according to the Group's own interests. Moreover, as explained in Note 40, the share of the Holding in this company rose to 75% in 2012.

Note 2 - Principles Regarding the Presentation of Financial Statements

A. Basic Guidelines Regarding the Presentation

Declaration of ConformityThe Group keeps its accounting records and prepares its legal financial statements according to Uniform Chart of Accounts, Turkish Commercial Code and Turkish Tax Legislation, and in conformity with the generally accepted accounting policies published by the Capital Markets Board (CMB), which apply to all companies listed on the Istanbul Stock Exchange.

With the "Communiqué on Principles Regarding Financial Reporting in Capital Markets" Serial: XI, No. 29, the Capital Markets Board specifies the principles, procedures and guidelines regarding financial reports prepared by entities, their preparation methods and their presentation to the interested parties. This Communiqué was put into effect to cover the financial statements of the first interim that ends after January 1, 2008 and it was repealed with the Capital Market Board's "Communiqué on Accounting Standards in Capital Markets" Serial: XI No. 25. Pursuant to Communiqué Serial: XI, No: 29, businesses apply International Accounting / Financial Reporting Standards (IAS / IFRS), endorsed by the European Union, and they include the provision endorsed by the European Union for IAS / IFRS in the footnotes of their financial statements. Within this context, Turkish Accounting / Financial Reporting Standards (TAS / TFRS), which are not contrary to the adopted standards, published by the Turkish Accounting Standards Board (TASB) shall prevail. However, the IAS / IFRS will remain in effect until the differences between the IAS / IFRS adopted by the European Union and those published by the International Accounting Standards Board (IASB) are announced by TASB.

The Group's consolidated financial statements and their attachments were prepared according to CMB's communiqué Serial: XI, No: 29. The consolidated financial statements and their footnotes were presented in compliance with the formats which were imposed as mandatory for implementation in CMB's announcement dated April 14, 2008.

In order to make fair measurements and presentations in accordance with IFRS, the consolidated financial statements of the Group are prepared to include revisions on legal records and re-classifications.

Comparative Information and Correction on the Financial Statements of the Previous Period

In order to provide an opportunity to detect the financial status and performance trends, the Group's consolidated financial statements are prepared by including comparison with the previous period. When the representation or the classification of financial statement items are changed, financial statements of the prior period are re-classified accordingly to provide comparability.

In the event of the Group applying an accounting policy in a retrospective manner, or a business adjusting the items of its financial statements in a retrospective manner, or making a re-classification on the items of its financial statements, it is required to present a minimum of a 3 period financial status statement (balance sheet), 2 period of statements for each of the other statements (comprehensive income statement, cash flow statement, changes in shareholders' equity statement) in addition to their related footnotes.




The Group makes the presentation of its consolidated financial status statements in the frequency defined by the periods below:

• as of the end of the current period,• as of the end of the previous period, • as of the beginning of the earliest comparative period.

Explanation Concerning Inflation Accounting and the Currency Unit of Reporting

With the decision taken by the Capital Markets Board on March 17, 2005, it was announced that implementation of inflation accounting is no longer required for companies that operate in Turkey and prepare their financial statements in accordance with the CMB Financial Reporting Standards, as of January 1, 2005. Therefore, as of January 1, 2005, the IAS 29 "Financial Reporting in Hyper Inflationary Economies", published by the IASB, was not implemented in the consolidated financial statements dated 31.12.2011.

The consolidated financial statements dated December 31, 2011 and the consolidated financial statements of the prior period to be used for comparative purposes, are prepared by using the currency unit Turkish Lira "TL".

As required by the standard IAS 21 "Effects of Changes in Foreign Exchange Rates", the Group records its foreign currency transactions in the functional currency unit with the amount that is calculated by applying the spot exchange rate between the foreign currency and the functional currency unit on the transaction date.

Closing exchange rates of foreign currencies published by the Central Bank of Turkey (CBT) on the dates December 31, 2011, and December 31, 2010, are listed below. Exchange Rates (TL / Currency Unit) Currency Type 31.12.2011 31.12.2010US$ 1.8889 1.5460EURO 2.4438 2.0491GBP 2.9170 2.3886CHF 2.0062 1.6438SEK 0.2722 0.22619

Netting

Assets - liabilities and revenues - expenses are not deducted unless anticipated or allowed by the Standards or Comments. Assets and liabilities are displayed on a net basis in cases where a legal right is present, an intention to evaluate those assets and liabilities in question on a net basis is present, an acquisition of assets is subjected and where fulfillment of liabilities is taking place simultaneously. Presenting the assets in their net amounts, which is calculated after being deducted by the regulatory accounts such as provision for decrease in value of inventories and provision for doubtful receivables, is not a netting.

Applied Consolidation Guidelines

The consolidated financial statements consist of the Holding's, as the parent company, and the Holding's subsidiary companies' financial statements which end on the date December 31, 2011. Subsidiary companies are included in the consolidation as of the dates on which their control is transferred to the Group, and they are removed from the consolidated subsidiary companies as of the date on which their control is removed from the Group. The consolidated financial statements of the Group represent the companies in which the Group literally has the authority and the power to control financial and operating policies in line with the Group's interests, either by using the authority granted by the Group's voting rights derived from the shares which belong to the Group either directly and / or indirectly if they exceed a 50% ratio, or by using the Group's active control on the companies' financial and operating policies if the Group does not have the authority to use more than 50% of the voting rights. Subsidiary companies were consolidated by using the full consolidation method. Therefore, their registered subsidiary values were netted by their related equities. Shareholders' equities and net profits for the period which belong to the subsidiary companies, and are attributed to the rights owners other than the main partnership, are represented in the consolidated statement of financial position (balance sheet), and in the consolidated comprehensive income statement, as minority shares.

The Group considers buying and selling transactions performed with the minorities, regarding the shares that belong to the partnerships the Group already has control of, as the usage of the expansion of the main partner method. Accordingly, for transactions regarding additional share purchasing from outside the main partnership, the difference between acquisition cost and the registered value of net assets calculated in proportion with the purchased share of the partnership is recognized as goodwill.

Balances and transactions among the Group companies were subjected to elimination, which was conducted by including inter Company profits, unrealized profits and losses. The consolidated financial statements were prepared by using similar accounting principles that are applied on transactions and events under similar conditions.

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Partnerships subjected to joint management are companies in which an economic activity is undertaken through a contract, and they are subjected to the joint control of the Group and one or more entrepreneur partners. According to the standard IAS 31 "Shares in Joint Ventures", partnerships subjected to joint management are consolidated either by using the proportional consolidation method, or by using the equity method as an alternative to the proportional consolidation method. Accordingly, in the consolidation of the Group's partnership subjected to joint management, the Group has used the alternative method, which is the equity method. According to the equity method, the partnership subjected to joint management is presented in the consolidated balance sheet by adding the Group's shares in the net assets of the partnership subjected to joint management and the post purchase changes to the partnership's costs, and then deducting the related provision if there are any reductions in value. The consolidated comprehensive income statement reflects the Group's shares in the operating results of the partnership subjected to joint management.

As the Group's partnerships is subjected to joint management, The Group classifies “İhlas Holding A.Ş. - İhlas Yayın Holding A.Ş. ve İhlas Pazarlama A.Ş. Ortak Girişimi (Joint Venture - 4)” and İhlas İletişim Hiz. A.Ş. (İhlas İletişim) among the Group's investments that are evaluated by the equity method.

B. Changes in Accounting Policies

Financial statement users should have the opportunity to compare an entity's financial statements over time, so that they can determine the entity's financial situation, performance and cash flow trends. Therefore, the same accounting policies are applied on each interim period and each accounting period.

The following conditions are not considered as changes in accounting policies;

-Implementation of an accounting policy on transactions or events which are different by nature when compared to previous transactions or events,-Implementation of a new accounting policy on transactions or events which have not occurred before or were not of importance before.

As required by the principle of consistency, the Group implements the same accounting policies on all of the periods.

Implementation of International Financial Reporting Standards which are new and revised:New standards, amendments and comments effective as of January 1, 2011 - December 31, 2011:

IAS 24 (Revision) "Related Party Explanations" (to be valid for accounting periods which begin on January 1, 2011, or later):

The aforementioned amendment is not expected to have any impact on the financial position and performance of the Company. This amendment was published on July 20, 2010 in the European Union official gazette.

IAS 32 (Amendment) “Classification of Rights Issues ” (The amendment is effective for annual periods beginning on or after February 1, 2010, with earlier application permitted.): The amendment to IAS 32 addresses the accounting for rights issues (rights, options or warrants) that are denominated in a currency other than the functional currency of the issuer. The aforementioned standard has no impact on the financial position and performance of the Group. This amendment was published on December 20, 2009 in the European Union official gazette.

IFRIC 14 (Amendment) "Reimbursement of Minimum Funding Conditions" (to be valid for accounting periods which begin on January 1, 2011, or later. An early implementation is permitted); this amendment solves the problem of entities not being able to perform recognition of some payments, which they perform voluntarily in advance to provide minimum funding requirements, as assets. This amendment was published on July 20, 2010 in the European Union official gazette.

IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments” (It is effective for annual periods beginning on or after July 1, 2010, with earlier application permitted.): IFRIC 19 only clarifies the accounting that will be applied by entities which export capital instruments to fully or partially extinguish a financial liability. The interpretation has no impact on the financial position and performance of the Company. This amendment was published on July 20, 2010 in the European Union official gazette.

IFRS 7 “Financial Instruments – Disclosures as part of its comprehensive review of off balance sheet activities (Amendment)”: The amendment is effective for annual periods beginning on or after July 1, 2011. This amendment allows users of financial statements to improve their understanding of transfer transactions of financial assets, including understanding the possible effects of any risks that may remain with the entity which transferred the assets. The amendment also requires additional disclosures if a disproportionate amount of transfer transactions are undertaken around the end of a reporting period. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Company. This amendment was published on November 23, 2011 in the European Union official gazette.




IFRS 1 “First-time Adoption of IFRS- Other Exceptional Situations” (Amendment): The new standard is effective for annual periods beginning on or after July 1, 2011. The amendment addresses the retrospective application of IFRSs to particular situations, and is aimed at ensuring that entities applying IFRSs will not face undue expense or effort in the transition process. There are also some additional amendments to IFRS 1 in order to provide explanatory information for companies who have recently came out of an inflationary medium among the first-time adopters of the financial statements according to IFRS. It has not yet been approved by the European Union. The Company is in the process of assessing the impact of the amended standard on the financial position and performance of the Company.

New standards, amendments and comments effective as of January 1, 2010 - December 31, 2010:

New standards and amendments which do not have any effect on the Group's financial situation or its performance are as follows;

IFRS 1 (Amendment) "First time Implementation of IFRS" - Additional exclusions concerning the first implementation: The amendment has no effect on the Group's financial performance.

IFRS 2 (Amendment) "Share Based Payments" - Share based payment transactions that are paid in cash: The amendment has no effect on the Group's financial performance.

IFRS 3 (Amendment), “Business Mergers” and IAS 27 (Amendment), "Consolidated and Unconsolidated Financial Statements"

IAS 39 (Amendment), "Financial Instruments: Recognition and Measurement" - Instruments with proper protection: The amendment has no effect on the Group's financial performance.

IFRIC 17, "Distribution of Non-Cash Assets to Shareholders": The amendment has no effect on the Group's financial performance.

Improvements in IFRS (published in 2008): The improvements have no effect on the Group's financial performance.

IFRS 1 (Amendment) - Limited exemption for the comparative IFRS 7 notes (to be valid for accounting periods which begin on July 1, 2010, or later; however, an early implementation is permitted): The amendment has no effect on the Group's financial performance.

Improvements in IFRS (published in 2009): The improvements have no effect on the Group's financial performance.

Improvements in IFRS (published in May 2010):

In May 2010, IASB issued its third omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. Various dates were announced for the date of implementation but for the earliest option, the standard is effective for annual periods beginning on or after 1 July 1, 2010 with earlier application permitted. This improvement project was endorsed by the European Union on February 19, 2011.

Revised standards are as follows:

IFRS 1: Changes in accounting policies during the first years of implementationIFRS 1: Basis of revaluation as an estimated costIFRS 1: The estimated use of cost for operations subjected to rate regulationIFRS 3: Transitional provisions regarding conditional fees arising from business mergers that have occurred before the date on which the revised IFRS was put into effect.IFRS 3: The measurement of shares without any control powerIFRS 3: Awards regarding share based payments that are either unchangeable or voluntarily changeableIFRS 7: Clarification in the footnotesIAS 1: Clarification in the statement of changes in equityIAS 27: Transitional provisions for the improvements in the standard IAS 27 "Consolidated and Solo Financial Statements"IAS 34: Important events and transactionsIFRIC 13: The fair value of gift points

The Group is of the opinion that implementation of the Standards and Comments above will not constitute a significant impact on the Group's consolidated financial statements in future periods.

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Standards and interpretations in issue but not effective and yet adopted on financial statements:

IFRS 9 “Financial Instruments”: Phase 1 Financial Assets and Liabilities, Classification and Explanation. The new standard is effective for annual periods beginning on or after January 1, 2015. Phase 1 of this new IFRS introduces new requirements for classifying and measuring financial instruments. Early adoption is permitted. This standard has not yet been endorsed by the EU. The Group is in the process of assessing the impact of the amended standard on the financial position and performance of the Group.

IFRS 10 “Consolidated Financial Statements”: The new standard is effective for annual periods beginning on or after January 1, 2013. IFRS 10 “Consolidated Financial Statements” replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. Besides, it includes the IFRIC 12 “Consolidation - Special Purpose Entities” Interpretation. IFRS 10 has formed the only control model which is applied to all entities (including special purpose entities and structural entities). This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IFRS 11 “Joint Regulations”: The new standard is effective for annual periods beginning on or after 1 January 2013. IFRS 11 has replaced the Standard IAS 31 “Interests in Joint Ventures” and the IAS Interpretation 13 “Jointly Controlled Entities-Non-Monetary Contributions by Venturers”. IFRS 11 accepts two different types of joint arrangements; joint operations and joint ventures. IFRS 11 uses the definition of control in IFRS 10 in order to define joint control. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IFRS 12 “Interests in Other Entities “: The new standard is effective for annual periods beginning on or after January 1, 2013. IFRS 12 includes all of the disclosures that were previously in IAS 27 Consolidated and Separate Financial Statements related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 Interests in Joint Ventures and IAS 28 Investment in Associates. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IFRS 13 “Fair Value Measurement”: The new standard is effective for annual periods beginning on or after January 1, 2013. It is a single source of guidance under IFRS for all fair value measurements. IFRS 13 provides guidance on how to measure the fair value of financial and nonfinancial assets and debts, but does not change when an entity is required to use fair value. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IAS 27 “Separate Financial Statements (Amendment)”: The amendment is effective for annual periods beginning on or after January 1, 2013. As a part of IAS 27 (2008), the regulation related to consolidation was removed from this standard, and it was re-amended as a result. This standard is now limited to accounting and explaining for subsidiaries, joint ventures and associates in the preparation of separate financial statements. In the event that an entity presents separate financial statements, either of its own will or by requirement of the legislation, this standard is applied in accounting of the investments for subsidiaries, joint ventures and associates. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IAS 28 “Investments in Associates and Joint Ventures (Amendment)”: The amendment is effective for annual periods beginning on or after January 1, 2013. As a consequential amendment to IFRS 10, IFRS 11 and IFRS 12, this standard is a part of IAS 28(2003). This standard describes the accounting of the investments of the associates, and the application of the equity method to investments if accounted, in joint ventures in addition to associates. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IAS 12 “Income Taxes - Deferred Taxes: Recovery of Underlying Assets (Amendment)”: The amendment is effective for annual periods beginning on or after January 1, 2012. IAS 12 has been updated to include i) a rebuttable presumption that deferred tax on investment property, measured using the fair value model in IAS 40, should be determined on the basis that its carrying amount will be recovered through sale and ii) a requirement that deferred tax on non-depreciable assets, measured using the revaluation model in IAS 16, should always be measured on a sale basis. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.




IAS 1 “Presentation of Financial Statements (Amendment)”: The amendment is effective for annual periods beginning on or after July 1, 2012. The amendments to IAS 1 change only the grouping of items presented in other comprehensive income. Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IAS 19 “Employee Benefits (Amendment)”: The amendment is effective for annual periods beginning on or after January 1, 2013. The corridor mechanism was removed with this amendment. The presentation choices of the profit or loss were also removed due to the provision of reporting the amendments at the time they occur. The service cost and the financial cost will be presented in profit or loss, and re-measurements will be presented in other comprehensive income. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IFRS 7 “Offsetting Financial Assets and Financial Liabilities - Disclosures (Amendment)” : The amendment is effective for annual periods beginning on or after January 1, 2015. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IAS 32 “Offsetting Financial Assets and Financial liabilities” (Amendment): The amendment is effective for annual periods beginning on or after January 1, 2014. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”: This interpretation is effective for annual periods beginning on or after January 1, 2013. The Interpretation clarifies when, and under which conditions, production stripping should lead to the accounting of an asset and how that asset should be measured and accounted. This standard has not yet been endorsed by the EU. The aforementioned standard is not expected to have any impact on the financial position and performance of the Group.

C. Revisions and Errors in the Accounting Estimates

Revisions and errors in the accounting estimates refer to corrections that are required due to changes in the amount of periodical usage which is caused by the determination of the book value of an asset, a foreign source or their current status, and the evaluation of their benefits or liabilities expected in the future. Revisions in the accounting estimates are caused by new information or a new development. Therefore, it does not mean the correction of errors.

During the preparation of financial statements according to IFRS, the Group management is required to make some estimates and assumptions which would affect the reported active and passive amounts, and the explanations concerning possible assets and liabilities as of the date of the balance sheet. Actual results may vary from the estimates and assumptions.

Significant changes in accounting policies and significant accounting errors detected are applied in a retrospective manner and financial statements of the prior period are re-issued. If the revisions in the accounting estimates relate to a single period, they are applied on the current period in which the change occurs. However, if the revisions in the accounting estimates relate to future periods, they are applied both on the current period in which the change occurs and on the next period in a prospective manner.

D. Summary of Significant Accounting Policies

Cash and Cash EquivalentsCash and cash equivalents include cash assets in the cash account, as well as cash money and time deposits in the banks, to be presented in the cash flow statement. Cash and cash equivalent values are shown with the sum of acquisition costs and their accrued interests. As required by the communiqué with Serial: XI, No. 29, financial investments with a maturity of less than three months are reported in the cash and cash equivalents group.

Financial InvestmentsFinancial investments are classified into three groups which are financial assets with trading purposes (their fair value difference is recognized in the income statement), financial investments to be held until maturity, and financial investments that are available-for-sale.

During the initial recognition of financial investments, which have a fair value difference that has not been reflected in the profit or the loss, the transaction costs, which can be directly linked to the acquisition of the related financial asset, are added to the fair value in question.

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Financial assets with trading purposes are composed of banks with a maturity longer than three months and marketable securities which are either obtained for generating profit from short-term market fluctuations in prices or similar elements, or are a part of a portfolio that is for generating profit in a short period of time regardless of the cause of acquisition. During their initial recognition, financial assets with trading purposes are measured by their fair values. Transaction costs regarding the acquisition of the related financial asset are added to its fair value, and they are subjected to valuation with their fair values in the periods following their recognition. Gains and losses calculated as a result of the valuation are included in the profit / loss accounts. Trading purpose financial investments without an active market are shown by their cost price in subsequent periods. Interests earned during the possession of marketable securities with trading purposes are firstly shown in the interest income and the dividend income derived from received profit shares. The purchasing and sales transactions of marketable securities with trading purposes are included to and excluded from the records according to their "delivery date".

Investments to be held until maturity are the financial investments which the entity has the intention and opportunity to hold onto until their maturity. These investments include payments of fixed or determinable nature and a fixed maturity date. Financial investments to be held until maturity are shown from their amortized cost price calculated by using the effective interest method in the periods following their recognition. Gains and losses calculated as a result of the valuation are included in the profit / loss accounts.

The effective interest method is a method which includes calculating the amortized costs of financial assets (or a group of financial assets) and distributing the related interest income or expenses to the associated period. The effective interest rate is the rate that exactly reduces the financial instruments' estimated cash payments and collections in the future (through the expected life or for a shorter period of time if applicable) to the net book value of the associated financial asset or liability.

Financial investments available-for-sale are financial investments which are defined as available-for-sale and are not classified as financial investments to be held until maturity, or financial investments that are reflected in the profit or loss. If an active market is present, the financial investments available-for-sale are evaluated over their fair value. All the gains and losses that result from the performed evaluation are shown as part of the equity, until the time the asset in question is sold. However, if an active market is not present, it is evaluated from its cost price.

Trade Receivables

Trade receivables arising from forward sales are evaluated from their amortized costs by using the effective interest method. If the effect of the interest accrued is insignificant, trade receivables without a specified interest rate are evaluated by regarding the invoice amount as a basis.

If the effective interest rates of trade receivables are unknown, a precedent interest rate is taken as a basis. A precedent interest rate is determined depending on the maturity of the trade receivable, which is followed by calculating an effective interest rate and the effective interest rate is used in the discounting process.

Promissory notes and post dated checks are classified as trade receivables; they are subjected to re-discounting and their reduced value (amortized cost values), which is calculated through the use of the effective interest rate method, is used when reporting.

According to the standard "IAS 39 Financial Instruments: Recognition and Measurement", the difference between the nominal amount of trade receivables and their amortized value is recognized as an interest expense.

Provision for doubtful receivables is recognized as expenses. The provision is the amount that is reckoned to compensate possible losses estimated by the Group management. These losses may arise from either economic conditions or the risk carried by the account due to its nature. There are various indicators when evaluating whether or not a receivable is a doubtful receivable. These indicators are as follows:

a) Data regarding the presence of receivables in previous years which could not be collected,b) The debtor's ability to pay,c) Extraordinary circumstances arising in the sector related to the field of activity, and in the current economic environment.

As a requirement of the standard IAS 1 "Presentation of Financial Statements", trade receivables are classified as short-term, even if they are going to be collected in a period of time that is longer than twelve months from the balance sheet date. This is because they are a part of the business capital used by the entity within the normal operating period.




Inventories

When evaluating the inventories either the cost or the net realizable value is taken as a basis, depending on which of the two is the lower. The cost of inventories includes all purchasing costs, conversion costs and other costs incurred in bringing the inventories to their current condition and location. Unit cost of inventories is determined by the moving weighted average method. The distribution of fixed production overheads over the conversion costs is based on the assumption that production activities would be at normal capacity. Normal capacity is the average amount of production which is expected to be obtained under normal conditions in a period, more than one period, or seasons. It is determined by taking into consideration capacity reductions arising from planned maintenance and repair work. If the actual production levels are close to the normal capacity, then this capacity is accepted as the normal capacity.

The net realizable value is the amount calculated by adding the estimated cost of completion and the estimated cost of sales required to perform the sale, and then deducting this sum from the estimated sale price in the ordinary course of business. The renovation costs of raw materials and supplies might be the best measure that reflects the net realizable value.

The acquisition costs of inventories are reduced to their net realizable values on the basis of each inventory item. This reduction is performed by allocating an allowance for the decline in the value of inventories. This means that if the cost prices of the inventories are greater than their net realizable value, then they are reduced to their net realizable value by allocating a provision for impairment. Otherwise, no action needs to be taken.

If the acquisition of the inventories was performed with a deferred payment condition or includes a financing element, the difference between the cash purchase price and the price that was actually paid for these elements, is recognized as interest expenses within the period of financing.

Tangible and Intangible Fixed Assets

The cost of a tangible or an intangible fixed asset item is reflected to the financial statements as an asset only in the event of the following conditions:

a) If it is probable that the future economic benefit regarding this item is going to be reflected to the entity, andb) If the cost of the item in question can be measured reliably.

A tangible or an intangible fixed asset item, which meets the conditions of its recognition as an asset, is measured with its cost price during its initial recognition. In subsequent periods, these assets are evaluated by using either their cost or re valuation method.

The initial costs of fixed assets consist of the purchase price, including customs duties, non-refundable purchase taxes and all direct costs until the asset is brought to its operating location, and until it is in running condition.

The cost model is to present a tangible or an intangible fixed asset by deducting the accumulated depreciation and impairments (if there are any) from its cost values.

The revaluation model requires a tangible or an intangible fixed asset item, which has a fair value that can be measured reliably, to be shown with its revalued amount after being recognized as an asset. The revalued amount is the value obtained by deducting the losses of subsequent accumulated depreciation and subsequent accumulated impairment from the asset's fair value on its date of revaluation. Revaluations are done on a regular basis as of the date of the balance sheet, so that there will not be a significant difference between the amount calculated by using the fair value and the book value. The Group uses the revaluation model for its tangible fixed assets if there are symptoms indicating significant differences. And the Group uses the cost model for its intangible fixed assets due to lack of an active market.

When a tangible fixed asset is revalued, the accumulated depreciation on the date of the revaluation is corrected in proportion with the changes in the asset's gross book value, and by doing so, the asset's book value after the revaluation becomes equal to the revalued amount.

The clauses of the standards IAS 2 "Inventories" and IAS 16 "Tangible Fixed Assets" are applied for the transfers of the Group from its inventories to tangible fixed assets in order to be used in operating activities. Accordingly, the fair value as of the transfer date is taken as a basis.

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Depreciation is calculated according to normal and accelerated depreciation methods, in addition to the following useful life and methods, by taking the pro rata basis into consideration: Useful Life (Years) MethodBuildings 50 Normal Machinery, plant and equipment 5-13 NormalVehicles, tools and materials 5-10 NormalFixtures and fittings 3-15 NormalOther tangible assets (Film)(*) 2 Normal / AcceleratedSpecial Costs 5 NormalRights 5 NormalOther intangible fixed assets (computer software) 2-5 Normal

(*) For the calculation of depreciation regarding films, a ratio of 60% was used for the first year and a ratio of 40% was used for the second year.

Useful life and depreciation method is reviewed on a regular basis, and accordingly, it is carefully examined to observe whether the method and the depreciation time are compatible with the economic benefits to be obtained from the asset in question.

Even when bought together, lands and buildings are separable tangible assets and they are recognized as separate assets. There are no depreciations allocated for assets such as lands and buildings as they have an undetectable useful life span. In other words, their useful life is considered as indefinite.

In case of events and changes in current conditions regarding impossibility of recovery in the carrying amount of tangible fixed assets, it is examined whether there is a decrease in the values of the tangible fixed assets in question. In the events of these kinds of symptoms, or if the carrying values exceed the realizable value, the related assets are reduced to their realizable values. Realizable value is either the net selling price or the use value of an asset, depending on which is the higher. When calculating the use value, estimated future cash flows are reduced to their present day value by using the pre-tax discount rate which reflects the asset specific risks. For assets that do not form large amounts of cash flow by themselves and independently, the realizable value is calculated for the cash forming units to which that asset belongs. The tangible fixed asset in question is depreciated from its estimated remaining useful life. In the income statement, the depreciation amounts and the impairment losses of tangible fixed assets are recorded under General Management Expenses, Marketing Sales and Distribution Expenses and Cost of Sales.

The Group has performed an impairment test for its assets and has determined their net selling prices by considering the assets' "second hand market values", and for those assets without a second hand market, the Group took the assets' "redeemed renovation costs" into consideration. Net selling prices were either equal to or more than the assets' net book values. Therefore, it was deemed unnecessary to calculate their use values and no impairment provisions were allocated.

Intangible fixed assets are used to represent brands, rights and other intangible items (such as computer software). For items purchased before January 1, 2005, intangible fixed assets are reflected by use of their corrected cost values due to the effects of inflation as of December 31, 2004. For items bought after December 31, 2004 intangible fixed assets are reflected by deducting the permanent impairment and the accumulated amortizations of their acquisition cost. Amortization regarding intangible fixed assets is allocated by using the straight-line amortization method, as of the date of purchase, over the useful life time of the related assets, provided that their economic life is not exceeded. In the income statement, the amortization of intangible fixed assets is recorded under General Management Expenses, Marketing Sales and Distribution Expenses and Cost of Sales. The brand "Türkiye" was purchased by İhlas Gazetecilik, one of the Group companies, in the year 2000, and is used as the brand of the newspaper published by this company. Due to the continuity of the entity, the brand is considered to have an indefinite useful life. Therefore, it was not subjected to amortization. As required by IAS 36 "Impairment of Assets", the aforementioned brand is undergoing an impairment test.

Any profits or losses occurring when selling off tangible and intangible fixed assets are determined by comparing their net book value to the sales amounts and in the current period, they are reflected in the related other operating income and expenses accounts.

Investment Purpose Real Estate Properties

Rather than the following purposes, investment purpose real estate properties are real estate properties that are kept in order to obtain a rental income, a gain from an increase in value, or both. These real estate properties are held by either the owner or the tenant, depending on the financial lease agreement. They can consist of land, a building, a part of a building, or both.

a) To be used for administrative purposes or in the production or supplying of goods or services; orb) To be sold under the normal course of business.




Investment purpose real estate properties are held for obtaining rental income, capital gain (capital appreciation) or both.

If the following conditions are met, the Group records an investment purpose real estate property as an asset:

a) If it is probable that the future economic benefit regarding this real estate property is going to be earned by the entity, andb) If the cost of the real estate property in question can be measured reliably.

An investment purpose real estate's initial measurement is performed according to its cost. Operation costs are also included in its initial measurement. However, investment purpose real estate properties purchased through financial leasing are recognized by either their fair values, or by the present value of the minimum lease payments, depending on which of the two is the lower.

Investment purpose real estate properties are valued in subsequent periods by electing to either use the fair value method or the cost method. In the valuation of its investment purpose real estate properties, the Group has chosen to use the fair value method.

When a tangible fixed asset is revalued, the accumulated depreciation on the date of the revaluation is corrected in proportion with the changes in the asset's gross book value; and by doing so, the asset's book value after the revaluation becomes equal to the revalued amount.

Gains or losses arising from changes of the fair value of an investment purpose real estate property are included in the profit or loss of the period in which they occur, and they are recognized in the other operating income / expenses accounts.

Depreciation is calculated according to straight-line method and the following useful life and methods by taking the pro rata basis into consideration: Useful Life (Years) MethodBuildings 50 Straight-Line

Even when bought together, lands and buildings are separable tangible assets and they are recognized as separate assets. Plots and land which were bought together are considered as a complementary part of the building. Therefore, when preparing a separate report for land shares, the land share ratio provided separately in the real estate property appraisal report of another independent section was used for those which were not separately presented in the Group's expertise reports. The section in question belongs to one of the Group's associated companies within the building in which the Group has some of its investment purpose real estate properties. There are no depreciations allocated for assets such as lands and buildings as they have an undetectable useful life span. In other words, their useful life is considered as indefinite.

Goodwill

Goodwill obtained from business mergers represents the payment performed by the acquiring entity for expected future economic benefits that derive from assets, which can neither be determined individually nor allow a separate recognition. Goodwill does not generate cash flows that are independent from other assets or asset groups. Instead, goodwill generally contributes to the cash flows of more than one cash-generating unit. Sometimes goodwill may necessarily be deployed only to a group of cash generating units, instead of individual units that generate cash. As a result, the lowest level of an entity that keeps track of goodwill for in house managerial purposes may sometimes consist of a group of cash generating units which are related to goodwill, but the goodwill cannot be deployed to these units. In business mergers without cash generating units or in business mergers where the cash generating unit does not contribute to the cash flow, and probably will not provide an economic benefit in the future, the generated amounts which cannot be identified as goodwill are directly associated with expenses and they are not capitalized.

Purchasing method is used for the recognition of all business mergers. The implementation of the purchase method is applied by adhering to the following steps:

a) Identifying the entity that conducts the acquisition,b) Identifying the cost of the business merger, andc) Deploying the cost of the business merger among the assets acquired, the liabilities undertaken and the contingent liabilities on the date of the business merger.

Goodwill is the difference between the cost of the acquired partnership, or the acquired assets as of the date of the acquisition, and the fair value of their net assets (or just the asset, for acquired assets). If the price of acquisition is more than the fair value of the acquired net assets, then the difference between these is reflected in the balance sheet as goodwill. If the price of acquisition is less than the fair value of the acquired net assets, then the difference is reflected in the income statement as profit derived from business mergers.

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According to IFRS 3 "Business Mergers", a provision of impairment in relation to goodwill is allocated if goodwill's recoverable value is less than its book value, and if there are issues that can be considered as an indication of impairment in an asset. Conditions which are considered as an indicator of reduction in the value of an asset include, presence of major changes in the fields of activity of the acquired entity, presence of major changes between the projected estimates made on the acquisition date and the actual results, if the product, service or technology belonging to the acquired entity is outdated or out of use, and the presence of other similar issues indicating that the book value of the asset in question is no longer recoverable.

Taxation and Deferred Taxes

The Group's tax expense / income consists of the sum of its current tax expense and deferred tax expense / income.

Current year tax liability is calculated over the taxable portion of the profit for the period. Taxable profit excludes income or expense items which can be taxed or deducted in other years, and items which are un-taxable or non deductible. Therefore, it may vary from the profit presented in the income statement. The Group's current tax liability was calculated by using the tax rate which is either already enacted, or certain to be enacted as of the date of the balance sheet.

If the current tax amounts to be paid are already paid or are going to be paid to the same tax authority, they are netted with the prepaid tax amounts. Deferred tax assets and liabilities are also netted in the same way.

Deferred taxes are calculated by using the temporary differences between the book values of the assets and liabilities that are included in the financial statements, and the related tax values (balance sheet method / balance sheet liability method). These temporary differences are classified into two categories, which are deductible and taxable. All temporary differences that have a deductible expense nature in tax aspects, are recognized as a deferred tax asset under the following conditions: it should be highly probable that there will be sufficient taxable income in future periods to deduct these expenses, the operation should not be a part of a business merger, and the debt should not be arising from its initial recognition. All taxable temporary differences are recognized as a deferred tax liability. However, a deferred tax liability is not recognized for the temporary differences if they are occurring during the initial recognition of goodwill, if they arise during the initial recognition of an asset or a liability, or if they are caused by operations which are not of a business merger nature.

According to the tax laws, financial losses and tax advantages of the past year, which have not yet been used, are recognized as deferred tax assets if it is probable that a taxable income will be obtained in the subsequent period by an amount that is enough to make them deductible.

According to the tax legislation in force, the valid and enacted tax rates as of the date of the balance sheet are used for calculating the deferred income tax.

Deferred tax liabilities are calculated for all taxable temporary differences. However deferred tax assets arising from deductible temporary differences are calculated only if it is highly probable that a benefit from these differences will be obtained by generating taxable profit in the future (Note 35).

Regarding the deduction of current tax assets from current tax liabilities, tax assets and tax liabilities deferred because of a legally enforceable right shall be mutually deducted from each other, provided that all of these operations are subjected to the same country's tax legislation.

A 75% portion of the gains occurring from sales of the following are exempt from corporate tax: all real estate properties and participation stocks that were among the entities' assets for at least two full years, founder's shares, dividend right certificates and pre emption rights. In order to benefit from the exemption, the gain in question is required to be kept in a fund account under the liabilities section of the balance sheet and they should not be withdrawn for 5 years; it is also required that the selling price should be collected, at the latest, by the end of the second calendar year following the year in which the sale occurs. Therefore, 25% of the differences regarding these assets are considered as temporary differences.

The brand "Türkiye" was acquired by one of the Group companies, İhlas Gazetecilik, through acquisition and this brand is part of the goodwill. The standard IAS 12 "Income Taxes" indicates that brands are subjected to amortization by the legal authorities. In other words, they are considered as a deduction item when calculating the financial profit. Therefore, the brand was evaluated as a temporary difference and it was subjected to deferred tax as a deferred tax liability.




Leasing

Financial LeasingFinancial leases envisioning the transfer of all risks and benefits related to the ownership of the asset that was leased to the Group, shall be recognized by reflecting one of the following as a basis, depending on which of the two is the lesser amount: the fair value of the asset subjected to leasing, or the present value of lease payments. Financial lease payments are allocated as capital and finance expenses all through the lease term, so that they would generate a constant periodic rate of interest over the remaining debt balance. Financing expenses are directly reflected in the income statement in periods. Capitalized leased assets are subjected to depreciation over the asset's estimated useful life.

Operational LeaseThe form of leasing in which the lessor party holds all the risks and benefits of the leased asset to themselves is classified as operational leasing. All through the lease term, the operating lease payments are recognized as expenses in the consolidated and comprehensive income statement, using the straight-line method.

Provision for Employee Termination Benefits

Provision for severance pay indicates the reduction of the estimated total provisions for possible future liabilities to the value of the balance sheet date for the following conditions or terms: if the employee of the Group becomes retired in conformity with the "Law on Arrangement of Relationships Between Employees Working In Press and Turkish Labor Law", or if the employee's employment relationship is discontinued after completing at least one year of service (at least five years of service for Press employees), if the employee is called to duty for his military service, or in the event of the employee's death (Note 24). The actuarial valuation method is used for the reduction of liabilities for employee termination benefits. In order to do this, actuarial assumptions were made. The most important of these is the discount rate used in performing the reduction.

The ratio used for discounting the benefit obligations (provisions for employee termination benefits) after the release of the employee is determined by observing market returns regarding high quality corporate bonds on the date of the balance sheet. Due to the lack of a deep market for such bonds, the real interest rate was used by taking the market returns (compound interest rates) of state bonds (on the date of the balance sheet) into consideration. In other words an interest rate (real interest rate) which is net of the effects of inflation is used (Note 24).

Within this context, as an institution subject to business law, a provision for severance pay was calculated in accordance with the "International Accounting Standard Regarding Benefits Provided to Employees" (IAS 19), and by using the actuarial method for future liability amounts which may arise if the entire personnel were to become retired, discontinued their working relations after completing a minimum of one year of service, if they were all called to duty for their military service, or in the event of death, the calculated severance pay is recognized in the attached consolidated financial statements.The assumptions used in the calculation of provisions for employee termination benefits are described in Note 24.

Provisions, Contingent Assets and Liabilities

Provisions are recognized only if the Group has a liability (legal or structural) that has been carried over from the past, if there is a probability that the Group's benefit generating resources might have to be sold because of this liability, and if the amount of the liability can be determined in a reliable manner.

If another party is expected to partially or entirely compensate the expenditure required for fulfilling the obligations of the liability, the related compensation is also included in the financial statements. However, in this scenario, it must be highly probable that if the Group was to fulfill the obligations of the liability, the related compensation would be acquired by the Group.

When allocating a provision, one of the three methods is applied. The first of these methods is applied when the time value of money is important. When the loss of value encountered by money over time gains importance, provisions are reflected by the reduced value (on the date of the balance sheet) of the expenses likely to occur in the future. When the reduced value is used, the increases that are going to occur in the provisions due to the passage of time are recognized as interest expenses. For the provisions in which the time value of the money is of importance, it is assumed that there are no risks or uncertainties when determining the estimated cash flows. The reduction of these provisions is performed by using the estimated cash flow and the risk free discount rate which is based on similar term government bonds. The second method is the expected value method. This method is applied when the provision is related to a large batch or a large number of incidents. With this method, the liability is estimated by taking all possible results into consideration. Meanwhile, the third method is applied when there is only a single liability or an incident. The application of this method involves reflecting the provision to the financial statements by estimating the most likely outcome.

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If a liability or an asset is of an uncertain nature, they are not included in the financial statements and they are considered as contingent liabilities and assets. Therefore, they are explained in the footnotes. This uncertain nature might be caused by past events, the asset's or liability's existence within the structure of the Group might be dependent on a condition over which the Group does not have full control, or it might be dependent on an event in the future which is not certain on the reporting date (See: Note 22 - 23).

Revenues

Revenue occurs when it is probable that an economic benefit is going to be received by an entity and it is recognized when the amount of income can be measured in a reliable manner. Revenues are shown in their net forms, which are obtained after deducting discounts, value added tax and sales taxes. For the formation of a revenue, the following criteria are required to be fulfilled.

Sale of GoodsRevenue is considered as occurring when the risks and benefits of the goods sold are transferred to the buyer, and when the amount of revenue can be calculated in a reliable manner. Net sales consist of the invoiced selling price, after the deduction of discounts and commissions are performed.

The Group's partnership subjected to joint management, which has been consolidated according to the equity method, does not have a progress price within its construction activities. Therefore, the provisions of IAS 11 are not applied and income regarding construction activities is measured by the standard IAS 18 "Revenue". The terms of reflecting sales of goods and services in financial statements are indicated in IAS 18, and the Group's construction proceeds are reflected in the financial statements in accordance with these terms. For sales that are performed in return for receipt of advance payment, the Group holds the risk until the product has been delivered and invoiced. The Group does not have any revenues until the delivery and invoice time.

Sales of ServicesWhen income from the sale of a service achieves a measurable completion level, it is considered as having occurred. In cases where a gain obtained from an agreement made cannot be measured reliably, the income is accepted by the recoverable amount of the expenses incurred.

InterestIn cases where the collection is not classified as doubtful, the income is considered to be earned on an accrual basis.

DividendThe income is considered to be earned when the right to receive a dividend is provided to the partners.

Revenues are measured by the fair value of a fee which is either obtained or will be obtained. If the sales are performed with a maturity, according to the standard "IAS 39 Financial Instruments: Recognition and Measurement", the difference between the nominal amount of the sales price and the fair value (the discounted value) is recognized as an interest income.In cases where the result of a transaction related to a sale of services can be estimated in a reliable manner, the revenue regarding the transaction is recognized by taking into consideration the completion level of the procedure on the date of the balance sheet.

Level of completion regarding the service transaction is determined by using various methods. Depending on the nature of the transaction, the preference made is based on which method provides a reliable measurement. Depending on the nature of the transaction, these methods are as follows:

a) investigations related to the work done, b) the ratio of the services to be provided until the date of the balance sheet, to the total of the services provided, and c) the ratio of total costs incurred until the present day within the estimated total costs.

Financing Income / Expenses which have not been Accrued

Financing income / expenses which have not been accrued, represent financial income and expenses regarding sales and purchases with terms. During the period of the credit sales and purchases, these revenues and expenses are calculated with the use of the effective interest method and they are shown under the item titled financial income and expenses.

Borrowing Costs

Borrowing costs which can be directly linked to the acquisition, construction or production of a qualifying asset, are capitalized as an element of the cost of the qualifying asset in question. If these types of costs can be measured in a reliable manner, and if it is probable that the future economic benefits deriving from them can be of benefit to the entity, they are included in the cost of the related qualifying asset. Borrowing costs other than those mentioned above are recognized as an expense in the period in which they occur.

In the following periods, these borrowing costs are presented in the financial statements at a discounted value. The difference between the provided cash entry and the repayment value is written off in the income statement throughout the borrowing period.




Earnings per Share

Earnings per share is calculated by dividing the part of the net profit or loss for the period that corresponds with the holders of ordinary shares, by the weighted average number of ordinary shares within the period. The weighted average of the total number of shares in circulation during the period is calculated by also taking the shares (bonus) issued into consideration without causing an increase in the sources.

Financial Instruments

Recognition and De- recognition of the Financial InstrumentsThe Group reflects financial assets or financial liabilities in its balance sheet only and only if the Group is defined as a party in the agreement of the financial instrument. The Group removes the financial asset or a portion of the financial asset from its books only and only if the Group cedes control over its contractual rights regarding the assets in question. The Group removes a financial liability from its books, only and only if the Group's liability as defined in the contract or agreement is eliminated, is cancelled or is subjected to expiry.

The Fair Value of Financial InstrumentsThe fair value of a financial instrument represents the amount for which the financial instrument in question can be exchanged between informed and willing parties through a current transaction under circumstances that the amount would not be affected by any relationship between the parties. If applicable, the fair value of a financial instrument is best determined by using a market price.

The estimated fair values of financial instruments are determined by the Group through the use of existing market information and the appropriate valuation methods. However, when estimating a fair value, the interpretation of the market data is left to the Group's decisions. As a result, the estimates presented herein, may not be an indication of the actual values which may be obtained by the Group in a current market transaction.

The following methods and assumptions were used while estimating the fair values of the financial instruments with a determinable fair value:

Financial AssetsBalances denominated in foreign currencies which are traded at the exchange rates at the end of the periods, are considered as an approximate for their book values. The foreign exchange rate expenses / income deriving from these types of financial instruments are reported within the financial expense / income account.

Financial assets presented at their cost price, including cash in hand and bank (including bank deposits), are of short-term nature, and losses of receivables regarding these assets are negligible. Therefore, they are considered as an approximate for their book value.

Foreign exchange rate expenses / income deriving from the appreciation of foreign currency balances, which are included in the cash and demand deposits accounts, are reported within the financial expense / income account. The amount of the term deposit (restricted and unrestricted) is valued according to the effective interest method; and the gains and losses regarding the term deposit are reported within the financial expense / income accounts. Gains and losses regarding investment funds are reported within the financial expense / income accounts as a sales profit / loss of marketable securities.

The fair values of marketable security investments have been estimated on the basis of market price on the date of the balance sheet.

Trade receivables are valued according to the effective interest method. All gains and losses which may derive from these trade receivables are associated with the sales account and the financing expense / income accounts.

Financial LiabilitiesShort-term and long-term bank loans are presented with their amortized cost values. Long-term loans with foreign currencies as their currency unit are exchanged by using the foreign exchange rates available at the end of the respective periods. Thus by doing so, their fair values become closer to their book values.

Trade payables are presented with their amortized cost values. As a requirement of the standard IAS 1, trade payables are classified as short-term, even if they are going to be paid in a period of time that is longer than twelve months from the balance sheet date. This is because they are a part of the business capital used by the entity within the normal operating period.In the event the Group is planning or preferring to re finance or rotate its financial liability within at least twelve months after the reporting period, this liability is classified as a long-term liability, even if the new payment program is short-termed. However, if the re financing or the rotation of the liability is not subject to the Group's preference or choice (for example, if a re financing agreement is not present), the probability of a re financing is not taken into consideration and the liability is classified as a short-term liability.

Trade payables and financial payables are valued according to the effective interest method. All gains and losses which may derive from these trade payables and financial payables are associated with the cost of sales account and the financing expense / income accounts.

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According to the standard, IAS 39 "Financial Instruments: Recognition and Measurement", financial assets are classified into four groups and financial liabilities are classified into two groups. Financial assets consist of those with a fair value (FV) difference that is reflected in the income statement, those which will be held until maturity, loans and receivables, and values that are available-for-sale. Financial liabilities are classified into two groups, which are those with a fair value difference that is reflected in the income statement, and other financial liabilities.

Fair value measurements are explained in the accounting policies regarding each and every financial asset and liability. There are no other incidents or events that require any valuation process. The book value of the cash and bank accounts are considered as an approximate for their fair value.

Financial Risk Management

Collection RiskA collection risk might be an issue for the Group, due to the Group's trade receivables in general. Trade receivables are evaluated by the Group management in light of market conditions and by taking past experiences into consideration. After this evaluation, a provision for doubtful receivables is allocated accordingly. A provision is allocated for doubtful receivables which will occur until the date of the report (Note 39).

Foreign Currency RiskForeign currency risk occurs due to changes in the value of a financial instrument which depend on changes in foreign currency exchange rates. As of the date of the report, the balances of the Group's transactions in foreign currencies resulting from its operations, investments and financial activities are described in Note 38. Due to the fact that the Group's net foreign currency is (-) as of 31.12.2011, a foreign currency risk arises for conditions where the foreign currency exchange rate falls in a manner that favors TL currency (when TL currency loses value against foreign currencies) (Note 39).

Liquidity RiskThe liquidity risk refers to the risk of encountering difficulties in providing funds to fulfill an entity's commitments regarding its financial instruments. The Group has been managing its liquidity risk by balancing the distribution of its assets and liabilities over time. (Note 39).

Related Parties

IAS 24 "Related Party Disclosures Standard" identifies an organization as an associated organization if the organization in question may directly or indirectly control, or significantly affect the other party through a relationship such as partnership, contractual rights, family relations or by similar means. The related parties also include the capital holders and the Group management. Related party operations consist of the resources and liabilities being transferred among the related parties with or without a fee.

In these financial statements, the parties identified as "related parties" include the Group's partners, companies that have an indirect capital relationship with the Group, members of the Board of Directors, senior managers and other key management personnel. The key management personnel consist of the people who directly or indirectly have the authority and responsibility of planning, managing and controlling the Group’s activities and also include any of the directors in the Group (administrative or other). (Note 37).

In general, transactions with the related parties, which occur as a result of ordinary activities of the Group, are performed with prices that are in accordance with market conditions. The companies and real people who have a direct or indirect relationship with the Group are as follows:

Related Company Titles

1) İhlas Holding A.Ş. (İhlas Holding)2) İhlas Ev Aletleri İmalat San.Tic. A.Ş. (İhlas Ev Aletleri)3) İhlas Pazarlama A.Ş. (İhlas Pazarlama)4) Kristal Kola ve Meşrubat Sanayi Ticaret A.Ş. (Kristal Kola)5) İhlas Madencilik A.Ş. (İhlas Madencilik)6) Kuzuluk Kapl. İnş. Tur. Sağ. Petr. Ür. Tic. A.Ş. (Kuzuluk Kaplıcaları)7) İhlas Net A.Ş. (İhlas Net)8) İhlas Motor A.Ş. (İhlas Motor)9) Bisan Bisiklet Moped Oto. San. Tic. A.Ş. (Bisan)10) Bisiklet Pazarlama ve Tic. A.Ş. (Bispa)11) İhlas Yapı Turizm ve Sağlık A.Ş. (İhlas Yapı)12) Kıbrıs Bürosu 13) Mir İç ve Dış Tic. Maden San. Ltd. Şti. (Mir Mining)14) Detes Enerji Üretim A.Ş. (Detes Enerji)




15) Armutlu Tatil ve Turizm İşletmeleri A.Ş. (Armutlu Tatil Köyü)16) İhlas Holding A.Ş. - İhlas Yapı Turizm ve Sağlık A.Ş. Joint Venture 2 (Joint Venture-2)17) İhlas Holding A.Ş. - İhlas Yapı Turizm ve Sağlık A.Ş. Joint Venture 3 (Joint Venture-3)18) İhlas Genel Antrepo Nakliyat ve Tic. A.Ş. (İhlas Antrepo)19) Buryal Bursa Yalova Enerji Dağıtım Ltd. Şti. (Bur-yal)20) Tasfiye Halinde İhlas Finans Kurumu A.Ş. (İhlas Finans in Liquidity)21) Kia İhlas Motor San ve Tic. A.Ş. (Kia İhlas Motor)22) İhlas Dış Ticaret A.Ş. (İhlas İnşaat Yapı Taahhüt ve Tic. A.Ş.) (İhlas Foreign Trade)23) İhlas İnşaat Proje Taahhüt Turizm ve Tic. A.Ş. (İhlas Construction Project)24) İhlas Enerji Üretim Dağıtım ve Tic. A.Ş. (İhlas Energy)25) İhlas Net Ltd. Şti. (İhlas Net Ltd)26) İhlas Mining Ltd. Şti. 27) İhlas Kimya San. Ltd. Şti. (İhlas Chemistry)28) İhlas Oxford Mortgage İnş. ve Tic. A.Ş. (İhlas Oxford)29) Detes Maden Enerji ve Çevre Tek. Sis. Ltd. Şti. (Detes Maden Ltd)30) Doğu Yatırım Holding A.Ş. (Doğu Investment)31) Swiss PB AG 32) İhlas Pazarlama Yatırım Holding A.Ş. (Pazarlama Investment Holding)33) İhlas İnşaat Holding A.Ş. (İnşaat Holding)34) Kristal Gıda Dağ. Paz. ve Tic. A.Ş. (Kristal Food)35) İhlas Meşrubat Üretim ve Pazarlama A.Ş. (İhlas Beverage)36) İhlas Zahav Otomotiv A.Ş. (İhlas Zahav)37) Şifa Yemek ve Gıda Üretim Tesisleri Tic. A.Ş. (Şifa Catering)38) KPT Lojistik Taşımacılık Tur. Rek. Paz. İç ve Dış Tic. A.Ş. (KPT Logistics)39) Tasfiye Halinde İhlas Barter A.Ş. (İhlas Barter)

Events After the Date of the Balance Sheet

Events after the date of the balance sheet refer to those events occurring between the dates of the balance sheet and the date of authorization for the distribution of the balance sheet. These events may be in favor of or against a company. In accordance with the provisions of IAS 10 "International Accounting Standard Regarding Events After the Date of the Balance Sheet", the Group corrects its consolidated financial statements to comply with the requirements of a new situation if the following conditions for a correction are present: if there are new evidences indicating that the events in question are indeed present, or if the events in question are revealed after the date of the balance sheet, and if these events require the correction of the financial statements. If the events in question do not require the correction of the financial statements, the Group explains these aforementioned issues in its related footnotes (See: Note 40).

Cash Flow Statement

In terms of a cash flow statement, cash consists of the cash within the entity and the demand deposits of the entity. Whereas cash equivalents stand for investments which have an amount that can be easily converted into a certain amount of cash, these are short-term investments with high liquidity and the risk derived from changes occurring in their conversion is insignificant. Cash equivalents are assets that are retained for short-term cash liabilities and they are not used for investment purposes or other similar purposes. In order to consider an asset as a cash equivalent, it must be easily converted to a cash amount with a precisely detectable value, and it is essential that the risk of changes in its value should be insignificant. Accordingly, investments with a maturity of 3 months or less are considered as cash equivalent investments. Investments done on marketable securities which represent the shareholders' equity are not considered to be cash equivalents, unless they are fundamentally cash equivalents to begin with (for example, preferential stock shares which have a certain date of amortization written on them and which are acquired in a short period of time before their maturities).

31.12.2011 31.12.2010Cash 1,034,447 778,982Bank 8,273,322 27,884,623Other cash equivalents 57,156 34,770Checks that will be expired on the day of the balance sheet 720,940 417,477Total 10,085,865 29,115,852

The Group prepares its cash flow statements in order to inform the financial statement users about its ability to orient changes in its net assets, its financial structure, the amount of its cash flows and the timing of its cash flows, in accordance with changing conditions.

In the cash flow statement, the cash flow for the period is reported according to the classification made on the basis of its business, investment and financing activities. Cash flows derived from operating activities, represent the cash flows which are derived from issues included in the Group's field of activity. Cash flows related to investment activities indicate the cash flows obtained by the Group through the investing activities (fixed investments and financial investments). Cash flows related to financing activities indicate the sources used by the Group in its financing activities, and the reimbursement of these sources.

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Reporting According to Operation Departments

Within the structure of an entity, an operation department can be defined as follows:(a) An operation department is engaged in the business activities from which the entity is able to obtain revenues and perform payments (including revenues and expenses related to transactions performed with other parts of the same entity),(b) An operation department is reviewed on a regular basis by the authority assigned by the entity, who is authorized to make decisions in the related activities. The purpose of this review is decision making regarding the resources to be provided for the department, evaluating the operating results and assessing the performance of the department, and(c) An operation department represents a part of an entity with separate financial information.

Reportable Departments The Group reports the following information regarding each and every operation department with a separate report:(i) Those determined as in compliance with the above mentioned paragraphs (paragraphs a, b and c) or the results obtained from combining two or more related departments together, and(ii) Those exceeding the threshold values presented in the following article consisting of the numerical lower limits, are reported separately.

Numerical Lower Limits The Group prepares a separate report containing information about an operation department that meets any of the following numerical lower limits:(a) If the reported revenues obtained by the operation department, including sales to non-business customers and interdepartmental sales or transfers, constitute 10 percent or more of the total values of all operation departments, both inside the entity and outside the entity,(b) If the absolute amount of the profit or loss reported by an operation department is 10 percent or more than the absolute figures of the profit report prepared by combining all of the operation departments that have not declared a loss, or 10 percent or more than the absolute figures of the loss report prepared by combining all of the operation departments that have declared a loss,(c) If the assets of an operation department is 10 percent or more than the total assets of all the operation departments.

E. Significant Accounting Assessments, Estimates and Assumptions, and Sources of Uncertainties

Preparation of financial statements involves the amounts of assets and liabilities reported as of the date of the balance sheet, the disclosure of contingent assets and liabilities and the use of estimates and assumptions which may have an affect over the amounts of income and expenses that are reported throughout the accounting period. Accounting assessments, estimates and assumptions are continuously evaluated by taking reasonable expectations into account. These reasonable accounts involve past experience, other factors and future events based on conditions of the present day. Although these estimates and assumptions are based on the managements' best information regarding current events and transactions, the actual results may vary from the assumptions.

The important estimates and assumptions used by the Group while preparing its consolidated financial statements are included in the following footnotes:

Note 2 / D Determination of fair values Note 10 ve 39 / E Provision for impairment of trade receivablesNote 13 Provision for impairment of inventoriesNote 2 / D, 17,18,19 Useful lives and provisions for impairment of investment purpose real estate properties, tangible and intangible fixed assetsNote 20 Provision for Impairment of GoodwillNote 22-23 Provisions for litigation and other liabilitiesNote 24 Provision for employee termination benefitsNote 35 / B Deferred tax assets and liabilities

The descriptions provided below include assumptions regarding the upcoming period which carry a particular risk that may lead to significant alterations on the assets and liabilities of the balance sheet in the next reporting period. The descriptions also include the sources of uncertainty in the calculations.

a) Within the framework of the specified accounting policies, the Group subjects intangible fixed assets with unlimited useful lives, and the registered values of goodwill, to an impairment test which may be conducted annually or when conditions indicate the presence of either a reduction in value, or a cancellation. An impairment test is conducted by comparing the intangible fixed assets that have unlimited useful lives and the registered values of goodwill, to their recoverable values. The recoverable values are determined by using the usage value calculations as a basis.b) Deferred taxes are recognized in the books only in the event of a detection indicating the probability of a taxable income in the years to come. If a taxable income is considered to be probable, the calculation regarding deferred tax assets is based on the unused accumulated losses and all deductible temporary differences. The Group has reviewed the transferred tax losses as of December 31, 2011.c) The management has also used some assumptions and projections during the determination of useful lives, determining the provision for doubtful receivables (Note 10 and 39 / E), the calculation of provisions for litigation and other liabilities (Note 22 - 23), and the calculation of the provision for severance payments (Note 24).




Note 3 - Enterprise Mergers

01.01-31.12.2011: None.

01.01-31.12.2010: In the meeting held by the Holding's Board of Directors, the following decision was made by taking into consideration the report prepared by Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş., which was based on the data of 30.09.2010, and was prepared according to the "Discounted Future Cash Flows Method". According to this decision, it was decided to buy the senior partner, İhlas Holding's shares in Promaş, which have a nominal value of TL 1,195,745, corresponding to 38.57%, for a price of TL 2,688,490. Also, it was decided to buy 58.23% of the shares owned by İhlas Pazarlama, which corresponds to TL 1,805,005 nominal value, for an amount of TL 4,058,880. The goodwill calculations regarding this decision are as follows:

Date of Share of Participation Acquisition Rate From Equity Amount Cost GoodwillDerived from Promaş's 96.8% shares acquired by the Holding 14.12.2010 731,809 6,747,370 6,015,561 The fair values of the definable assets and liabilities derived from the acquisition are as follows:

Cash and cash equivalents 92,814Trade receivables (short and long-term) 3,246,350Other receivables (short and long-term) 178,156Inventory 64,212Other current assets 390,151Tangible fixed assets 106,102Deferred tax assets 458,139Trade payables (short and long-term) (2,964,123)Provisions for employee termination benefits (502,125)Deferred tax liability (9,690)Other short-term and long-term liabilities (303,985)The fair value of the acquired net assets 756,001Share of participation rate from the fair value of the acquired net assets (96.8%)(1) 731,809Acquisition amount (Purchasing fee)(2) 6,747,370Goodwill (2-1) 6,015,561

Again, in the meeting held by the Holding's Board of Directors, the following decision was made by taking into consideration the report prepared by Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş., which was based on the data of 30.09.2010, and was prepared according to the "Discounted Future Cash Flows Method". According to this decision, it was decided to buy the senior partner, İhlas Holding's shares in İhlas Medya, which have a nominal value of TL 562,500, corresponding to 25%, for a price of TL 723,080. Also, it was decided to buy 74% of the shares owned by İhlas Pazarlama, which corresponds to TL 1,665,000 nominal value, for an amount of TL 2,140,330. The goodwill calculations regarding this decision are as follows:

Date of Share of Participation Acquisition Rate From Equity Amount Cost GoodwillDerived from İhlas Media's 99% shares acquired by the Holding 14.12.2010 1,334,970 2,863,410 1,528,440

The fair values of the definable assets and liabilities derived from the acquisition are as follows:Cash and cash equivalents 157,754Trade receivables (short and long-term) 3,440,149Other current assets 471,376Tangible fixed assets 2,002Deferred tax assets 36,936Trade payables (short and long-term) (2,668,854)Provisions for employee termination benefits (7,383)Deferred tax liability (8,925)Other short-term and long-term liabilities (74,600)The fair value of the acquired net assets 1,348,455Share of participation rate from the fair value of the acquired net assets (99%)(1) 1,334,970Acquisition amount (Purchasing fee)(2) 2,863,410Goodwill (2-1) 1,528,440

100

Note 4 - Joint Ventures

Partnerships Subjected to Joint ManagementThe Group has included its partnership subjected to joint management, titled “İhlas Holding A.Ş. - İhlas Yayın Holding A.Ş. ve İhlas Pazarlama A.Ş. Ortak Girişimi” (Joint Venture - 4) in its consolidation, which has been prepared in accordance with the equity method. The partnership was established as an ordinary partnership, in order to jointly supply for works regarding the distribution of income after provision for the sale of land. The Group's active participation in this partnership is 45%, and the financial information regarding this partnership is as follows: 31.12.2011 31.12.2010Current / floating assets 68,566,756 37,282,020Non-current / fixed assets 189 21,740,856Total assets 68,566,945 59,022,876Short-term liabilities 48,703,795 1,408,790Long-term liabilities 72,880 57,619,186Shareholders' Equity 19,790,270 (5,100)Total sources 68,566,945 59,022,876Net profit / loss for the period 19,795,370 (105,100)

Emlak Pazarlama İnşaat Proje Yönetimi ve Ticaret A.Ş. transferred their rights and liabilities to this partnership in question. These rights and liabilities are set forth in the contract signed regarding the construction project at Istanbul, Bahçeşehir, Ispartakule, Region 2, Section 3, Block 543, Parcel 1 for distribution of income after the provision of sale of land. The project, consisting of 680 residences and 1 office space, is completed as of December 12, 2011 and the 438 houses were transferred to the owners together with invoices.

Note 5 - Reporting on the Basis of Department of Activity

For the period January 01 - December 31, 2011:

Journalism and News TV Fair and Advertising Other Intra-group Group

Printing Works Agency Services Magazine Agency Eliminations Total

Sales Revenues (net) 80,268,189 28,164,329 21,616,444 9,408,956 25,536,046 672,782 (12,526,210) 153,140,536

Sales Costs (-) (71,763,395) (25,615,337) (15,734,277) (5,630,233) (25,241,154) (329,297) 10,359,970 (133,953,723)

Gross Profit / Loss 8,504,794 2,548,992 5,882,167 3,778,723 294,892 343,485 (2,166,240) 19,186,813

Operating Expenses (-) (14,647,587) (4,670,320) (8,917,323) (3,711,481) (131,705) (3,608,471) 2,642,013 (33,044,874)

Income and Profits from

Other Operations 2,546,681 239,612 491,299 197,776 33,393 1,653,700 (475,773) 4,686,688

Expenses and Losses

from Other Operations (-) (732,599) (615,187) (747,218) (583,416) (81,053) (130,751) - (2,890,224)

Operating Profit / Loss (4,328,711) (2,496,903) (3,291,075) (318,398) 115,527 (1,742,037) - (12,061,597)

Profit / Loss Shares from

Investments that are Evaluated

by the Equity Method - - - - - 8,902,946 - 8,902,946

Financial income /

(expenses), net 5,725,056 58,815 (105,250) 97,630 31,622 1,461,033 7,268,906

Pre-tax Profit / Loss

from Ongoing Activities 1,396,345 (2,438,088) (3,396,325) (220,768) 147,149 8,621,942 - 4,110,255

Total assets 245,889,237 22,825,893 11,269,511 5,293,372 5,143,032 66,308,225 (12,935,040) 343,794,230

Total Liabilities 37,521,523 12,085,475 10,946,115 3,353,844 2,395,820 10,273,256 (12,935,040) 63,640,993

The distribution of the Group's Sales Revenues (net) is as follows:

Journalism and News TV Fair and Advertising Other Group

Printing Works Agency Services Magazine Agency Total

Sales Revenues (net) 80,268,189 28,164,329 21,616,444 9,408,956 25,536,046 672,782 165,666,746Intra-Group 1,749,286 456,689 9,651,207 428,797 - 240,231 12,526,210Out-Group 78,518,903 27,707,640 11,965,237 8,980,159 25,536,046 432,551 153,140,536




For the period January 01 - December 31, 2010:

Journalism and News TV Fair and Other Intra-group Group

Printing Works Agency Services Magazine Eliminations Total

Sales Revenues (net) 70,398,199 24,762,318 8,082,047 7,977,238 1,774,182 (2,391,524) 110,602,460

Sales Costs (-) (58,514,495) (22,124,353) (4,450,932) (4,988,607) (456,449) 832,346 (89,702,490)

Gross Profit / Loss 11,883,704 2,637,965 3,631,115 2,988,631 1,317,733 (1,559,178) 20,899,970

Operating Expenses (-) (17,103,807) (2,348,611) (3,705,623) (2,724,219) (4,049,032) 1,670,594 (28,260,698)

Income and Profits from

Other Operations 6,928,297 925,194 306,846 200,250 1,580,183 (133,580) 9,807,190

Expenses and Losses

from Other Operations (-) (288,940) (165,681) (892) (63,227) (2,288,256) 22,164 (2,784,832)

Operating Profit / Loss 1,419,254 1,048,867 231,446 401, 435 (3,439,372) - (338,370)

Profit / Loss Shares from

Investments that are Evaluated

by the Equity Method - - - - (50,070) - (50,070)

Financial Income /

(Expenses), net 5,983,343 (199,887) (530,214) (26,383) 1,222,957 - 6,449,816

Pre-tax Profit / Loss

from Ongoing Activities 7,402,597 848,980 (298,768) 375,052 (2,266,485) - 6.061.376

Total assets 244,714,880 21,678,543 8,275,551 4,713,191 68,640,772 (5,514,629) 342,508,308

Total liabilities 37,224,542 11,080,855 5,748,595 2,420,852 16,740,983 (5,514,629) 67,701,198

The distribution of the Group's Sales Revenues (net) is as follows:

Journalism and News TV Fair and Other Group

Printing Works Agency Services Magazine Total

Sales Revenues (net) 70,398,199 24,762,318 8,082,047 7,977,238 1,774,182 112,993,984Intra-Group 1,047,540 391,006 751,000 129,196 72,782 2,391,524Out-Group 69,350,659 24,371,312 7,331,047 7,848,042 1,701,400 110,602,460

Note 6 - Cash and Cash Equivalents

31.12.2011 31.12.2010 Cash 1,034,447 778,982 - Turkish lira 450,270 566,603 - Foreign currency 584,177 212,379Bank 8,273,322 27,884,623 - Demand Deposits 2,632,706 1,587,455 - Turkish lira 1,161,002 771,224 - Foreign currency 1,471,704 816,231 - Time Deposits 5,640,616 26,297,168 - Restricted term deposit - 20,934,300 - Unrestricted term deposit 5,002,192 - - Repo 314,000 4,853,745 - Liquid funds 324,424 509,123Other Liquid Assets 57,156 34,770Checks that will be expired on the day of the balance sheet 720,940 417,477Total 10,085,865 29,115,852

Note 7 - Financial Investments

Short and Long-Term Financial Investment

31.12.2011: None (31.12.2010: None).

102

Note 8 - Financial Liabilities

31.12.2011 31.12.2010 Short-Term Financial Liabilities 3,796,722 3,238,050Bank Loans 154,401 119,566Financial leasing operations 3,642,321 3,118,484Long-Term Financial Liabilities 3,541,907 2,841,906Bank Loans 39,073 68,244Financial leasing operations 3,502,834 2,773,662

a) Bank Loans

31.12.2011 Applied Interest Rate Amount in Currency Unit Minimum Maximum Maturity TL Currency Short-term loans TL 9.25% 18.00% up to 3 months 41,903 TL 9.25% 18.00% between 3 and 12 months 112,498Total Short-Term Loans 154,401Long-term loans TL 15.60% 15.60% 1-5 years 39,073Total Long-Term Loans 39,073

31.12.2010 Applied Interest Rate Amount in Currency Unit Minimum Maximum Maturity TL Currency Short-term loans TL 9.25% 18.00% up to 3 months 33,429 TL 9.25% 18.00% between 3 and 12 months 86,137Total Short-Term Loans 119,566Long-term loans TL 15.60% 15.60% 1-5 years 68,244Total Long-Term Loans 68,244

The amortized values and contract values of bank loans are presented in Note 39-F.

The maturity analyses as of December 31, 2011 and December 31, 2010, are shown below:

31.12.2011 31.12.2010up to 3 months 41,903 33,429Between 3 and 12 months 112,498 86,137Between 1 and 5 years 39,073 68,244Total 193,474 187,810

b) Financial Leasing Operations

31.12.2011 31.12.2010 Amount in Amount in Currency Unit Maturity TL Currency TL Currency Short-Term Leasing Payables TL up to 3 months - - US$ up to 3 months 211,750 156,610 EURO up to 3 months 850,783 664,405 TL Between 3 and 12 months - - US$ Between 3 and 12 months 735,769 505,773 EURO Between 3 and 12 months 1,844,019 1,791,696Total Short-Term Leasing Payables 3,642,321 3,118,484 US$ Between 1 and 5 years 1,844,118 1,013,432 EURO Between 1 and 5 years 1,658,716 1,760,230Total Long-Term Leasing Payables 3,502,834 2,773,662




The maturity analyses of long-term financial leasing debts as of December 31, 2011 and December 31, 2010, are shown below:

31.12.2011 31.12.20102012 - 2,157,7742013 1,562,814 328,7182014 1,217,820 287,1702015 649,184 -2016 73,016 -Total 3,502,834 2,773,662

Note 9 - Other Financial Liabilities

Unamortized bank loans as of December 31, 2011 and December 31, 2010, are shown below:

31.12.2011 31.12.2010Other Short-Term Financial Liabilities 1,968,805 1,970,865Unamortized Bank Loans 1,968,805 1,970,865 - Turkish Lira 1,968,805 1,970,865 - Foreign Currency - -Other Long-Term Financial Liabilities - -Total 1,968,805 1,970,865

As of the date 31.12.2011 and 31.12.2010 unamortized bank loans consist of revolving loans.

Note 10 - Trade Receivables and Payables

31.12.2011 31.12.2010

Trade receivables from related parties(1) 26,906,905 8,748,375-Gross amount of trade receivables 29,128,223 9,336,464-Doubtful trade receivables 112,307 --Minus: rediscount regarding trade receivables from related parties (2,221,318) (588,089)-Minus: Provision for doubtful receivables(2) (112,307) -Other trade receivables 42,682,432 56,864,776-Buyers 22,296,280 32,500,597-Post dated checks and notes receivables 22,022,344 25,572,078-Doubtful trade receivables 12,256,238 10,351,477-Minus: rediscount regarding trade receivables (1,998,356) (2,085,035)-Minus: Provision for doubtful receivables(2) (11,894,074) (9,474,341)Total 69,589,337 65,613,151

(1) Related details are described in Note 37.(2) Reconciliation regarding the provision for doubtful trade receivables as of the beginning and the end of the period is as follows:

31.12.2011 31.12.2010Balance as of January 1 (9.474.341) (7.367.356)Provisions derived from new acquisitions at the beginning of the period - (1.078.336)Provisions no longer required in the period 341.409 1.167.598The provision amount allocated during the period (2.873.449) (2.196.247)Balance as of the end of the period (12.006.381) (9.474.341)

In addition to the allocated provisions, the ageing analysis for those without an allocated provision for impairment, even though they are past due, and for those that are overdue and a provision for impairment was allocated, are described in detail in Note 39-E.

104

31.12.2011 31.12.2010Trade payables to related parties(3) 1,277,491 7,474,753-Gross amount of trade payables 1,331,256 7,703,429-Minus: rediscount regarding trade payables to related parties (53,765) (228,676)Other trade payables 11,084,994 12,902,872-Gross amount of vendors 9,710,497 10,175,851-Post dated checks and the gross amount of notes payable 1,685,526 2,931,811-Minus: rediscount regarding trade payables (311,029) (204,790)Total 12,362,485 20,377,625

(3) Related details are described in Note 37.

The maturity analyses of (net) trade payables which are not past due as of the dates 31.12.2011 and 31.12.2010 are presented in Note 39-F.

Note 11 - Other Receivables and Payables

31.12.2011 31.12.2010Receivables from shareholders(*) - 448,379Receivables from personnel 253,604 245,013Other receivables 184,617 218,228Deposits and guarantees given 12,688 17,167Other Receivables (Short-Term) 450,909 928,787Deposits and guarantees given 54,679 37,603Other Receivables (Long-Term) 54,679 37,603

(*) Described in Note 37. 31.12.2011 31.12.2010Payables to personnel 1,699,077 1,568,352 - Payables to key personnel(*) 62,347 87,150 - Payables to other personnel 1,636,730 1,481,202Other various payables 209,738 196,787Other Payables (Short-Term) 1,908,815 1,765,139

(*) Described in Note 37.

Note 12 - Receivables and Payables Resulting from Financial Sector Operations

31.12.2011: None (31.12.2010: None).

Note 13 - Inventories

31.12.2011 31.12.2010Raw materials and supplies 7,034,427 6,478,288Finished goods 89,929 115,474Goods 625,594 775,676Other inventory 179,070 249,982Provision for impairment of inventory (-) (495,975) (880,399)Total 7,433,045 6,739,021

Reconciliation regarding the provision for impairment of inventory as of the beginning and end of the period is as follows:

31.12.2010 31.12.2010Balance as of the beginning of the period (880,399) (1,454,450)Provision for impairment (-) / provisions that are no longer required (+), net 384,424 574,677Provisions derived from new acquisitions - (626)Balance as of the end of the period (495,975) (880,399)




Conditions that cause the cancellation of provisions for impairment in inventories are as follows: a) changes in estimated market selling price and expense, b) sales of inventory items for which a provision was allocated, c) current economic conditions, and d) the inventory policy pursued by the Group.

There are no inventories presented as guarantee for the Group's liabilities (Previous period: None).

As the inventories are not covered by the qualifying asset definition in the standard IAS 23 "Borrowing Costs", financing expenses regarding the inventories are associated with the income statement and they are not capitalized.

Note 14 - Biological Assets

31.12.2011: None (31.12.2010: None).

Note 15 - Balances Related to Construction Contracts in Progress

31.12.2011: None (31.12.2010: None).

Note 16 - Investments Evaluated with the Equity Method

31.12.2011 Amount of Capital DifferenceCompany Title Effective Rate % Participation Commitments (-) in Valuation Net ValueJoint Venture - 4 45 45,000 - 8,860,622 8,905,622İhlas İletişim 20 200,000 - (7,746) 192,254TOTAL 245,000 - 8,852,876 9,097,876

31.12.2010 Amount of Capital DifferenceCompany Title Effective Rate % Participation Commitments (-) in Valuation Net ValueJoint Venture - 4 45 45,000 - (47,295) (2,295)İhlas İletişim 20 200,000 (150,000) (2,775) 47,225TOTAL 245,000 (150,000) (50,070) 44,930

Shares of Investments Valued by Equity Method in Profit / (Loss)

Current Period Previous PeriodRevaluation Funds for the Beginning of the Period (a) (50,070) -Revaluation Funds for the End of the Period (b) 8,852,876 (50,070)Revaluation Funds During the Period (Increase - Decrease) (b-a) 8,902,946 (50,070)

The Group has included its partnership subjected to joint management, titled “İhlas Holding A.Ş. - İhlas Yayın Holding A.Ş. ve İhlas Pazarlama A.Ş. Ortak Girişimi” (Joint Venture - 4) in its consolidation, which has been prepared in accordance with the equity method. The partnership was established as an ordinary partnership, in order to jointly supply for works regarding the distribution of income after provision for the sale of land. The Group's active participation in this partnership is 45%. The summarized financial statement and information regarding the aforementioned partnership's activities are presented in Note 4.

İhlas İletişim is the other company included by the Group in the consolidation, which was prepared according to the equity method. İhlas İletişim's fields of activity include providing all kinds of telephone, telecommunication and similar services, and the summarized information regarding this Company's financial statements dated 31.12.2011 is as follows: 31.12.2011 31.12.2010Current Assets 1,039,709 671,802Fixed Assets 12,418 6,352Short-Term Liabilities 65,077 420,596Long-Term Liabilities 25,778 21,430Shareholders' Equity 961,272 236,128Net Sales 1,667,547 661,708Net Profit / Loss for the Period (22,676) 5,119

106

Note 17 - Investment Property

Investment purpose real estate properties are evaluated in accordance with the fair value method, and the behavior charts according to the periods are as follows:

01.01.2011 Inputs Outputs 31.12.2011Investment Purpose Real Estate Properties Lands and Parcels 57,288,536 1,045,184 (4,002,198) 54,331,522Buildings 45,150,840 1,263,345 (3,189,080) 43,225,105Total 102,439,376 2,308,529 (7,191,278) 97,556,627Minus: Accumulated Depreciation Buildings (5,153,839) (894,770) 301,885 (5,746,724)Total (5,153,839) (894,770) 301,885 (5,746,724)Investment Purpose Real Estate Properties (net) 97,285,537 91,809,903

The investment purpose real estates received by the Group through financial leasing are as follows:

01.01.2011 Inputs Outputs 31.12.2011Investment Purpose Real Estate Properties Lands and Parcels 17,415,321 - - 17,415,321Buildings 13,252,607 - - 13,252,607Total 30,667,928 - - 30,667,928Minus: Accumulated Depreciation Buildings (2,831,051) (300,642) - (3,131,693)Total (2,831,051) (300,642) - (3,131,693)Investment Purpose Real Estate Properties (net) 27,836,877 27,536,235

January 01 - December 31, 2010 01.01.2010 Inputs Outputs 31.12.2010Investment Purpose Real Estate Properties Lands and Parcels 47,475,586 9,812,950 - 57,288,536Buildings 38,147,140 7,003,700 - 45,150,840Total 85,622,726 16,816,650 - 102,439,376Minus: Accumulated Depreciation Buildings (4,309,559) (844,280) - (5,153,839)Total (4,309,559) (844,280) - (5,153,839)Investment Purpose Real Estate Properties (net) 81,313,167 97,285,537

The investment purpose real estates received by the Group through financial leasing are as follows:

01.01.2010 Inputs Outputs 31.12.2010Investment Purpose Real Estate Properties Lands and Parcels 17,415,321 - - 17,415,321Buildings 13,252,607 - - 13,252,607Total 30,667,928 - - 30,667,928Minus: Accumulated Depreciation Buildings (2,530,409) (300,642) - (2,831,051)Total (2,530,409) (300,642) - (2,831,051)Investment Purpose Real Estate Properties (net) 28,137,519 27,836,877

The total amounts of pledges, restrictions or mortgages on the Group's real estate properties with investment purposes are TL 125.400.000 and US$ 25.000.000 (31.12.2010: TL 128.400.000 and US$ 32.500.000).




The Group has no investment purpose real estate properties that are already being used and have been fully amortized.As investment purpose real estate properties are not covered by the qualifying asset definition in the standard IAS 23 "Borrowing Costs", financing expenses regarding investment purpose real estate properties are associated with the income statement and they are not capitalized.

Revaluation for the investment purpose real estate is done with expertise, and the impairments and revaluation funds are evaluated as a result of the expertise reports. (Fair value method)

Note 18 - Tangible Fixed Assets

January 01 - December 31, 2011 01.01.2011 Inputs Outputs Transfers (*) 31.12.2011Tangible Fixed Assets Lands and Parcels 12,906,139 - - - 12,906,139Buildings 7,253,176 - - - 7,253,176Plant, machinery and equipment 92,608,784 4,937,950 (16,400,075) - 81,146,659Vehicles 3,454,450 833,775 (446,735) - 3,841,490Fixtures 22,115,750 742,253 (523,522) 13,674 22,348,155Other tangible fixed assets 1,827,729 88,000 (46,000) - 1,869,729Special costs 198,826 33,257 - - 232,083Total 140,364,854 6,635,235 (17,416,332) 13,674 129,597,431Minus: Accumulated Depreciation Buildings (111,370) (145,064) - - (256,434)Plant, machinery and equipment (74,460,735) (3,666,666) 16,387,147 - (61,740,254)Vehicles (2,400,010) (336,776) 321,963 - (2,414,823)Fixtures (20,550,071) (630,052) 527,343 - (20,652,780)Other tangible fixed assets (1,596,679) (211,650) 26,600 - (1,781,729)Special costs (175,233) (14,418) - - (189,651)Total (99,294,098) (5,004,626) 17,263,053 - (87,035,671)Tangible Fixed Assets (net) 41,070,756 42,561,760

(*) These are the transfers from the stocks to tangible fixed assets in order to be used in operating activities.

January 01 - December 31, 2010 01.01.2010 Inputs Outputs New Acquisitions 31.12.2010Tangible Fixed Assets Lands and Parcels 152,041 12,754,098 - - 12,906,139Buildings 172,274 7,080,902 - - 7,253,176Plant, machinery and equipment 84,048,102 8,743,377 (367,070) 184,375 92,608,784Vehicles 3,076,491 577,790 (292,440) 92,609 3,454,450Fixtures 20,384,336 533,821 (2,970) 1,200,563 22,115,750Other tangible fixed assets 582,500 46,000 - 1,199,229 1,827,729Special costs 153,774 12,887 - 32,165 198,826Total 108,569,518 29,748,875 (662,480) 2,708,941 140,364,854Minus: Accumulated Depreciation Buildings (20,614) (90,756) - - (111,370)Plant, machinery and equipment (68,136,950) (6,322,352) 159,657 (161,090) (74,460,735)Vehicles (2,097,793) (425,807) 214,218 (90,628) (2,400,010)Fixtures (18,607,865) (824,605) 125 (1,117,726) (20,550,071)Other tangible fixed assets (45,625) (351,825) - (1,199,229) (1,596,679)Special costs (131,416) (11,652) - (32,165) (175,233)Total (89,040,263) (8,026,997) 374,000 (2,600,838) (99,294,098)Tangible Fixed Assets (net) 19,529,255 41,070,756

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The tangible fixed assets received by the Group through financial leasing are as follows:

01.01.2011 Inputs Outputs 31.12.2011Tangible Fixed Assets Plant, machinery and equipment 10,524,798 4,026,430 - 14,551,228Total 10,524,798 4,026,430 - 14,551,228Minus: Accumulated Depreciation Plant, machinery and equipment (2,305,365) (1,655,444) - (3,960,809)Total (2,305,365) (1,655,444) - (3,960,809)Tangible Fixed Assets (net) 8,219,433 10,590,419

01.01.2010 Inputs Outputs 31.12.2010Tangible Fixed Assets Plant, machinery and equipment 4,478,977 6,219,432 (173,611) 10,524,798Total 4,478,977 6,219,432 (173,611) 10,524,798Minus: Accumulated Depreciation Plant, machinery and equipment (1,630,632) (760,092) 85,359 (2,305,365)Total (1,630,632) (760,092) 85,359 (2,305,365)Tangible Fixed Assets (net) 2,848,345 8,219,433

Revaluation for the lands, parcels and buildings is done with expertise, and the impairments and revaluation funds are evaluated as a result of the expertise reports. (Fair value method)

The total amounts of pledges, restrictions or mortgages on the Group’s tangible fixed assets are TL 29.630.000. (31.12.2010: TL 28.830.000 and US$ 6.400.000).

As tangible fixed assets are not covered by the qualifying asset definition in the standard IAS 23 "Borrowing Costs", financing expenses regarding tangible fixed assets are associated with the income statement and they are not capitalized.

The Group does not possess any tangible fixed assets that are temporarily in an inactive condition.

As required by the standard IAS 36 "Impairment of Assets", the Group has performed an impairment test on its tangible fixed assets. The results of the impairment test indicated that the net selling prices of the assets (their fair value after the deduction of the related sales costs) are greater than the book value of the assets. Therefore, it was deemed unnecessary to calculate their usage values and no impairment provisions were allocated.

Note 19 - Intangible Fixed Assets

January 01 - December 31, 2011 01.01.2011 Inputs Outputs 31.12.2011Cost Brand 56,125,860 - - 56,125,860Rights 3,071,572 - - 3,071,572Computer software 384,637 1,245,788 - 1,630,425Total 59,582,069 1,245,788 - 60,827,857Minus: Accumulated Depreciation Rights (3,069,506) (140) - (3,069,646)Computer software (373,791) (200,334) - (574,125)Total (3,443,297) (200,474) - (3,643,771)Intangible Fixed Assets (net) 56,138,772 57,184,086




January 01 - December 31, 2010 Cancellation New of Provision 01.01.2010 Inputs Outputs Acquisitions for Impairment 31.12.2010 Cost Brand 51,876,000 - - - 4,249,860 56,125,860Rights 3,069,472 2,100 - - - 3,071,572Computer software 373,762 - (2,549) 13,424 - 384,637Total 55,319,234 2,100 (2,549) 13,424 4,249,860 59,582,069Minus: Accumulated Depreciation Rights (3,069,471) (35) - - - (3,069,506)Computer software (345,818) (14,930) 381 (13,424) - (373,791)Total (3,415,289) (14,965) 381 (13,424) - (3,443,297)Intangible Fixed Assets (net) 51,903,945 56,138,772

Gross book values of the Company’s intangible fixed assets that are already being used and have been fully amortized are as follows:

31.12.2011 31.12.2010Other Intangible Fixed Assets 117,181 117,181Total 117,181 117,181

Pledges, restrictions or mortgages over the intangible fixed assets that belong to the Group;

31.12.2011: None (31.12.2010: None).

The concept of continuity was taken into consideration in the assesment of whether or not the brand value has an unlimited useful life. The summary information, assumptions and methods related to the assessment report of the “Türkiye” brand, which is owned by the Company, being tested for impairment by an assessment company and used as the brand name of the newspaper issued by the Company, are as follows:

-During the brand valuation, the factors taken into consideration by the valuation company were the macroeconomic factors (economic indicators (gross national product, inflation rates), data regarding the media and printing industries (newspaper circulations, advertising revenues, etc.)), in addition to the financial statements and projections regarding İhlas Journalism.

- The methods used for the valuation: During the brand valuation works, the methods that were the most useful included The Method of Determining the Brand by Separating Goodwill from the Company Value, The Method of Freeing from Name Rights, and the method which is used most by the OECD and Financial Institutions - the Profit Sharing Method.

- In the valuation conducted in accordance with the Method of Freeing from Name Rights, the value of the brand was calculated as TL 33.419.268. In the valuation conducted in accordance with the Method of Determining the Brand by Separating Goodwill from the Company Value, the value of the brand was calculated as TL 56.125.860. In the valuation conducted in accordance with the Profit Sharing Method, the value of the brand was calculated as TL 38.637.511 for 25% of the reduced income, and as TL 77.275.022 for 50% of the reduced income.

Among the above methods, the appraisal company has chosen TL 56,125,860, which was determined by using the Method of Determining the Brand by Separating Goodwill from the Company Value, as the amount that represents the value of the brand "Türkiye" in a realistic manner.The details for the provisions/cancellations for impairment regarding the aforementioned brand are as follows:

31.12.2011 31.12.2010Opening balance (23,749,223) (27,999,083)Provision (-) / Cancellation for Impairment - 4,249,860Period end balance (23,749,223) (23,749,223)

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Note 20 - Goodwill

31.12.2011 31.12.2010a) Goodwill derived from İhlas Fuar's acquisition 3,894,202 3,894,202b) Goodwill derived from İletişim Magazin's acquisition 1,904,525 1,904,525c) Goodwill derived from Promaş's acquisition 6,015,561 6,015,561d) Goodwill derived from İhlas Reklam's acquisition 1,528,440 1,528,440Total Goodwill 13,342,728 13,342,728

a) On 28.03.2008, one of the Group companies, İhlas Gelişim acquired İhlas Holding's and Hüseyin Ferruh Işık's shares of İhlas Fuar, which were 92% of the Company shares, and had a nominal value of TL 230,000. The pricing of this acquisition was determined according to the company valuation report prepared by Can Uluslararası Bağımsız Denetim ve S.M.M.M. A.Ş. on 25.03.2008, and the method used in the report was "the discounted cash flow analysis method". According to the report the Company's worth was determined as TL 3,371,444 (92% of this value is TL 3,101,728), and the acquisition was completed for the amount of TL 3,100,400. The goodwill calculations regarding this acquisition are as follows: Share of Participation Date of Rate From Acquisition Equity Amount Cost GoodwillDerived from İhlas Gelişim's participation in İhlas Fuar 28.03.2008 (793,802) 3,100,400 3,894,202

In order to determine whether there are any reductions in value of goodwill derived from the acquisition in question as of 31.12.2011, the Group has procured a company valuation report. The company valuation report, dated 16.01.2012, was prepared by Yeditepe Bağımsız Denetim according to the Net asset value method, market factors analysis method and discounted cash flow analysis method. According to this valuation report, the company's value was determined as TL 7,073,853 (92 % of the company’s value: TL 6,507,945). As can be observed in the table below, there were no impairments regarding the goodwill;

The value of 92 % of İhlas Fair Services, according to the valuation report, dated 05.01.2012 6,507,94592 % of İhlas Fair Services’ Equity Amount, as of 31.12.2011 1,864,336Positive Goodwill as of 31.12.2011 4,643,609Positive Goodwill as of 31.12.2010 3,894,202Provision for Impairment of Goodwill as of 31.12.2011 (-) -

b) ) On 28.03.2008, one of the Group companies, İhlas Gelişim acquired İhlas Holding's and Mehmet Söztutan's shares of İletişim Magazin, which were 95% of the Company shares, and had a nominal value of TL 47,500. The pricing of this acquisition was determined according to the company valuation report prepared by Can Uluslararası Bağımsız Denetim ve S.M.M.M. A.Ş. on 25.03.2008, and the method used in the report was "the market factors analysis and the discounted cash flow analysis methods". According to the report the Company's worth was determined as TL 1,997,182 (95% of this value is TL 1,897,323) and the acquisition was completed for the amount of TL 1,895,250. The goodwill calculations regarding this acquisition are as follows:

Share of Participation Date of Rate From Acquisition Equity Amount Cost GoodwillDerived from İhlas Gelişim's participation in İhlas Magazin 28.03.2008 (9,275) 1,895,250 1,904,525

In order to determine whether there are any reductions in value of the goodwill derived from the acquisition in question as of the date 31.12.2011, the Group has procured a company valuation report. The company valuation report, dated 29.12.2012, was prepared by Yeditepe Bağımsız Denetim A.Ş. according to "Net asset value, market factors analysis and discounted cash flow analysis methods". According to this valuation report, the Company's value was determined as TL 5,140,259 (95% of this value is TL 4,883,246). As can be observed in the chart below, there were no impairments regarding the goodwill;

The value of 95% of İletişim Magazin's, According to the Valuation Report, Dated 29.12.2012 4,883,24695% of İletişim Magazin's Equity Amount, as of the Date 31.12.2011 (82,578)Positive Goodwill as of 31.12.2011 4,965,824Positive Goodwill as of 31.12.2010 1,904,525Provision for Impairment of the Goodwill as of the date 31.12.2011 (-) -




c) In the meeting held by the Holding's Board of Directors, the following decision was made by taking into consideration the report prepared by Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş., which was based on the data of 30.09.2010, and was prepared according to the "Discounted Future Cash Flow Method". According to this decision, it was decided to buy the main partner, İhlas Holding's shares in Promaş, which have a nominal value of TL 1,195,745, corresponding to 38.57%, for a price of TL 2,688,490. Also, it was decided to buy 58.23% of the shares owned by İhlas Pazarlama, which corresponds to TL 1,805,005 nominal value, for an amount of TL 4,058,880. The goodwill calculations regarding this decision are as follows:

Share of Participation Date of Rate From Acquisition Equity Amount Cost GoodwillDerived from Promaş's 96.8% shares acquired by the Holding 14.12.2010 731,809 6,747,370 6,015,561

In order to determine whether there are any reductions in value of goodwill derived from the acquisition in question as of 31.12.2011, the Group has procured a company valuation report. The company valuation report, dated 26.12.2012, was prepared by Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri according to the "Discounted Future Cash Flow Method". According to this valuation report, the company's value was determined as TL 8,175,523 (96,8 % of this value is TL 7,913,906). As can be observed in the table below, there were no impairments regarding the goodwill;

The value of 96,8% of Promaş's, According to the Valuation Report, Dated 26.12.2011 7,913,90696,8% of Promaş's Equity Amount, as of the Date 31.12.2011 125,939Positive Goodwill as of 31.12.2011 7,787,967Positive Goodwill as of 31.12.2010 6,015,561Provision for Impairment of the Goodwill as of the Date 31.12.2011 (-) -

d) In the meeting held by the Holding's Board of Directors 13.12.2010, the following decision was made by taking into consideration the report prepared by Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş., which was based on the data of 30.09.2010, and was prepared according to the "Discounted Future Cash Flows Method". According to this decision, it was decided to buy the senior partner, İhlas Holding's shares in İhlas Media, which have a nominal value of TL 562,500, corresponding to 25%, for a price of TL 723,080. Also, it was decided to buy 74% of the shares owned by İhlas Pazarlama, which corresponds to TL 1,665,000 nominal value, for a an amount of TL 2,140,330. The goodwill calculations regarding this decision are as follows:

Share of Participation Date of Rate From Acquisition Equity Amount Cost GoodwillDerived from İhlas Medya's 99% sharesacquired by the Holding 14.12.2010 1,334,970 2,863,410 1,528,440

In order to determine whether there are any reductions in the value of goodwill derived from the acquisition in question as of 31.12.2011, the Group has procured a company valuation report. The company valuation report, dated 26.12.2011, was prepared by Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş. according to the "Discounted Future Cash Flow Method". According to this valuation report, the company's value was determined as TL 3,242,026 (99 % of this value is TL 3,209,606). As can be observed in the table below, there were no impairments regarding the goodwill;

The value of 99% of İhlas Medya's, According to the Valuation Report, Dated 26.12.2011 3,209,60699% of İhlas Medya's Equity Amount, as of the Date 31.12.2011 1,350,973Positive Goodwill as of 31.12.2011 1,858,633Positive Goodwill as of 31.12.2010 1,528,440Provision for Impairment of Goodwill as of 31.12.2011 (-) -

Note 21 - Government Grants and Incentives

31.12.2011: None (31.12.2010: None).

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Note 22-23 - Provisions, Contingent Assets and Liabilities, Commitments

a) Guarantees, mortgages and pledges given by the Group:The Group's charts regarding its position for guarantees, pledges and mortgages (GPM) are as follows:

Total (inGPMs Given by the Group US$ Balance EURO Balance TL Balance TL Currency)(31.12.2011) A. The Total Amount of GPMs Given by the Main Partnership in Favor of Its Own Legal Entity - - - -B. i. The Total Amount of GPMs Given by the Main Partnership in Favor of Subsidiary Companies Included in The Full Consolidation 1,093,153 - 2,971,389 5,036,246B. ii. The Total Amount of GPMs Given by the Subsidiary Companies Included in The Full Consolidation in Favor of Their Own Legal Entities and in Favor of Each Others 841,435 88,851 57,497,088 59,303,608B. iii. The Total Amount of GPMs Given by the Subsidiary Companies Included in The Full Consolidation in Favor of the Main Partnership - - - -C. The Total Amount of GPMs Given by the Group for Assuring the Liabilities of Other 3rd Parties so that the Group's Ordinary Commercial Activities can be Executed - - - -D. The Total Amount of Other GPMs Given by the Group 30,103,470 225,000 122,527,640 179,939,939i. The Total Amount of GPMs Given by the Group in Favor of the Main Partner 25,103,470 - 118,763,640 166,181,584ii. The Total Amount of GPMs Given by the Group in Favor of Other Group Companies Which are not Included in the Scopes of Articles B and C 5,000,000 225,000 2,764,000 12,758,355iii. The Total Amount of GPMs Given by the Group in Favor of Third Parties Which are not Included in the Scope of Article C - 1,000,000 1,000,000Total 32,038,058 313,851 182,996,117 244,279,793Total Equity of the Group 280,153,237The Ratio of the Other GPMs Given by the Group over the Equity of the Group 64.23%

Total (inGPMs Given by the Group US$ Balance EURO Balance TL Balance TL Currency)(31.12.2010) A. The Total Amount of GPMs Given by the Main Partnership in Favor of Its Own Legal Entity 6,070,617 - - 9,385,174B. i. The Total Amount of GPMs Given by the Main Partnership in Favor of Subsidiary Companies Included in The Full Consolidation 697,934 - 2,800,172 3,879,178B. ii. The Total Amount of GPMs Given by the Subsidiary Companies Included in The Full Consolidation in Favor of Their Own 6,943,680 88,851 1,342,657 12,259,650B. iii. The Total Amount of GPMs Given by the Subsidiary Companies Included in The Full Consolidation in Favor of the Main Partnership - - - -C. The Total Amount of GPMs Given by the Group for Assuring the Liabilities of Other 3rd Parties so that the Group's Ordinary Commercial Activities can be Executed - - - -D. The Total Amount of Other GPMs Given by the Group 39,680,473 225,000 180,646,819 242,453,878i. The Total Amount of GPMs Given by the Group in Favor of the Main Partner 32,500,000 - 156,230,000 206,475,000ii. The Total Amount of GPMs Given by the Group in Favor of Other Group Companies Which are not Included in the Scopes of Articles B and C 7,180,473 225,000 23,416,819 34,978,878iii. The Total Amount of GPMs Given by the Group in Favor of Third Parties Which are not Included in the Scope of Article C - - 1,000,000 1,000,000Total 53,392,704 313,851 184,789,648 267,977,880Total Equity of the Group 274,807,110The Ratio of the Other GPMs Given by the Group over the Equity of the Group 88.23%




b) The summarized information on important litigations and performances related to the Group as of the date 31.12.2011, is as follows:

AmountOngoing lawsuits that were initiated by the Group 323,548Enforcement proceedings conducted by the Group 3,247,745Ongoing lawsuits that were initiated against the Group 1,280,973Enforcement proceedings conducted against the Group 102,799

c) Details regarding provisions for litigation and provisions for other liabilities of the Group as of the dates December 31, 2011, and December 31, 2010, are as follows: 31.12.2011 31.12.2010Provisions for lawsuits 84,861 57,700Debt Provisions (Short-Term) 84,861 57,700Contractual provisions(*) - 750,000Provisions for lawsuits 604,262 267,331Debt Provisions (Long-Term) 604,262 1,017,331

(*) Pursuant to the contract made between the Holding and News Netherlands regarding the sale of Huzur Radyo TV A.Ş. (TGRT) in the year 2006, there are no liabilities in the current period about possible liabilities and claims arising in the pre-sale period. (31.12.2010: TL 750,000)

The transaction information regarding the provisions allocated for lawsuits against the Group as of the dates December 31, 2011, and December 31, 2010, is as follows: 31.12.2011 31.12.2010Balance at the beginning of the period 325,031 255,951Payments (57,700) (5,000)Provisions for no longer valid lawsuits (10,000) (58,320)Provision expense 431,792 132,400Balance at the end of the period 689,123 325,031

The Group did not allocate provision for lawsuits against the Group with high probability of winning. However, the Group has allocated provisions for those lawsuits which might be lost, or in other words, which might lead to the loss of economic resources.

Note 24 - Benefits Provided to the Personnel 31.12.2011 31.12.2010Long-Term Liabilities Provision for employee termination benefits 9,528,218 8,106,846Total 9,528,218 8,106,846

According to Labor Law, the Group is obliged to pay severance pay to its personnel in the event of the presence of the following situations, provided that the employee has completed at least one full year of service: if the employment of an employee is terminated without any valid reasons, if the employee is called to duty by the military, if the employee dies. The severance pay which the Group is obliged to pay also applies to staff who have retired after completing the required service time, which is 25 years for men and 20 years for women, provided that they have reached their retirement age, which is 58 years of age for women and 60 years of age for men. The amount to be paid is capped at the following amounts and is equal to one month's salary.

- 31.12.2011: TL 2,732 - 31.12.2010: TL 2,517

On the other hand, the Group is subjected to the "Law on Arrangement of the Relationships Between Employees Working in the Press".

Therefore, the Group is obliged to pay severance pay to each of its personnel whose employment is terminated after having worked in the Press sector for a minimum of five years, regardless of the grounds of the termination. The compensation to be paid is limited to an amount worth 30 days' salary for each year that the employee has worked. There are no maximum limit applications when calculating severance pay for press staff.

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The right to early retirement for those working in the press, publishing, packaging and printing jobs have been removed as of October 1, 2008.

There are no regulations regarding pension commitments, except for the legal regulations explained above.

As it is not required to allocate a fund, no funds were allocated regarding this liability.

Provision for severance pay is calculated at an estimated value that represents the Group's possible liability in the future, which may arise from the retirement of its employees, on the date of the balance sheet.

IAS 19 "Benefits to Employees" requires companies to use actuarial valuation methods when estimating the companies' liabilities within the scope of certain social benefit plans. Accordingly, actuarial assumptions and existing legal obligations were used during calculations regarding the total liability.

The main actuarial estimates and assumptions used are as follows: 31.12.2011 31.12.2010Discount rate 4.25% 4.66%Estimated interest rate 9.52% 10%Estimated inflation rate (the expected rate of increase in salary) 6.56% 5.10%Rate of unpaid severance pay liability (average) 13% 7%

Behavior chart of the net deferred tax assets is as follows: 31.12.2011 31.12.2010Balance on January 1 8,106,846 4,413,667Provision derived from new acquisitions - 509,508Payments (1,098,710) (955,059)Provisions cancelled during the period (185,583) (396,725)Provisions allocated during the period 2,705,665 4,535,455Balance at the End of the Period 9,528,218 8,106,846

Note 25 - Pension Plans

There are no regulations regarding pension commitments, except for the legal regulations explained in Note 24.

Note 26 - Other Assets and Liabilities 31.12.2011 31.12.2010Business advances 19,526,034 12,226,318Advances given for purchase orders(*) 2,907,338 1,643,248Expenses for future months 1,145,905 1,246,853Prepaid tax claims 275,246 173,656Income accruals - 67,876Value Added Tax to be transferred 183,480 5,555Other Current / Floating Assets 24,038,003 15,363,506Expenses for future years 355,881 105,462Advances paid (for the fixed assets) 215,622 25,798Other Intangible / Fixed Assets 571,503 131,260

31.12.2011 31.12.2010Advances received for purchase orders(*) 3,435,999 2,716,645Taxes, fees and other deductions to be paid 2,525,912 1,558,146Deferred and installed public receivables 1,408,389 1,342,752Income regarding future months 292,766 278,905Income accruals - 175,000Other Short-Term Liabilities 7,663,066 6,071,448Deferred and Installed Public Receivables 329,285 -Expenses for future years 25,352 -Other Long-Term Liabilities 354,637 -

(*) Advances given for purchases to related parties are described in Note 37.




Note 27 - Shareholders' Equity

A. Paid-in CapitalThe Holding's approved and issued share capital consists of shares and each of these shares have a registered nominal value of TL 1. The Holding’s upper limit of registered capital is TL 600,000,000.

As of December 31, 2011, and December 31, 2010, the Holding's approved and issued share capital, and its capital structure are as follows:

31.12.2011 31.12.2010Name / Title Share ratio % Share Amount (TL) Share ratio % Share Amount (TL)İhlas Holding A.Ş. 69.15 138,300,000 69.15 138,300,000Free Float 28.75 57,500,000 28.75 57,500,000Enver Ören 1.00 2,000,000 1.00 2,000,000Ahmet Mücahid Ören 0.90 1,800,000 0.90 1,800,000Mahmut Kemal Aydın 0.10 200,000 0.10 200,000Other 0.10 200,000 0.10 200,000Total 100.00 200,000,000 100.00 200,000,000Distinction from Share Capital Adjustments 22,039,497 22,039,497Total 222,039,497 222,039,497

According to the General Assembly Decision regarding the amendment of the articles of association, dated 13.09.2010, the distribution of and the benefits provided by the Holding's preferential shares (group B shares) are as follows:

Partner's Name / Title Registered / Bearer Quantity Amountİhlas Holding A.Ş. Registered 8,000,000 8,000,000Enver Ören Registered 1,000,000 1,000,000Ahmet Mücahid Ören Registered 900,000 900,000Mahmut Kemal Aydın Registered 100,000 100,000Total 10,000,000 10,000,000

Benefits Provided from Preferential Sharesa- Regarding the prerogative of choosing a Member of the Board of Directors;If the General Assembly of the Holding decides that the Board of Directors consist of 5 people, at least 4 of the Members of the Board of Directors are selected from among candidates nominated by group (B) shareholders. Similarly, at least 5 of the members are selected among those candidates if a board of 7 people is decided, at least 7 of the members are selected among those candidates if a board of 9 people is decided and at least 9 of the members are selected among those candidates if a board of 11 people is decided.

b- Regarding the prerogative of choosing a Comptroller;If the General Assembly decides the number of comptrollers as one, this comptroller is selected among the candidates nominated by group (B) shareholders. Similarly, at least two of the comptrollers are selected among those candidates if a comptroller number of three is decided.

c- Regarding the prerogative of voting at the General Assembly Meetings;In the ordinary and extraordinary General Assembly Meetings of the Holding, each group B shareholder has 100 (one hundred) vote rights for each share they possess. The provisions of TCC’s article 387 are reserved.

B. Restricted Reserves That are Allocated from Profit

According to the Turkish Commercial Code, legal reserves are classified into two, which are the primary and the secondary legal reserves. Until the primary legal reserves reach 20% of the sum of revalued paid-in capital, they are allocated by an amount that corresponds to 5% of the net profit in the legal financial statements. The secondary legal reserves are allocated as 10% of the sum of dividend distributions exceeding 5% of the revalued capital. Within the framework of TCC provisions, legal reserves are only used for netting the losses; and they are not allowed to be used for any other purpose unless they exceed 50% of the paid in capital. 31.12.2011 31.12.2010Legal reserves 94,670 94,670Statuary reserves 10,015 10,015Special reserves 6,845,759 6,845,006Total 6,950,444 6,949,691

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The transaction chart regarding the Legal Reserves according to fiscal period is as follows:

31.12.2011 31.12.2010Balance on January 1 94,670 60,140Impact of new acquisitions - 27,239Transfer from the net profit for the period - 9,808Changes in active shares - (2,517)Balance at the end of the period 94,670 94,670

The transaction chart regarding the Special Reserves according to fiscal period is as follows:

31.12.2011 31.12.2010Balance on January 1 6,845,006 6,475,204Impact of new acquisitions - 396,000Changes in active shares 753 (26,198)Balance at the end of the period 6,845,759 6,845,006

C. Revaluation Fund

31.12.2011: None (31.12.2010: None).

D. Profit / Loss for the Previous Years

According to CMB's communiqué Serial: XI, No: 29, which entered into force as of January 1, 2008, "Paid-in Capital" is required to be presented from the amounts that represent "Restricted Reserves That Are Allocated from Profit" and "Premiums on Sale of Share Certificates" in the legal records. The differences occurring in the valuation during the implementation of the aforementioned communiqué are processed as follows:

- If the difference is derived from "Paid-in Capital" and if the difference has not yet been added to the capital, then the difference is associated with the item "Capital Adjustment Difference" coming right after the item "Paid-in Capital",- If the difference is derived from "Restricted Reserves That Are Allocated from Profit" and "Premiums on Sale of Share Certificates", and if it is not subjected to profit sharing or share capital increase it is associated with the "Accumulated Profit/Loss of previous years".

The transaction chart regarding the profits / losses for previous years according to fiscal period is as follows:

31.12.2011 31.12.2010Balance on January 1 (53,780,025) (60,619,811)Net profit / (loss) for the previous period 1,348,456 8,106,093Changes in active shares - (1,256,499)Transfer to legal reserves - (9,808)Balance at the end of the period (52,431,569) (53,780,025)

E. Minority shares

The transaction chart regarding minority shares according to fiscal period is as follows: 31,12,2011 31.12.2010Balance on January 1 98,249,491 87,628,758Changes in active shares 23,906 7,282,157Capital payments 1,395,000 229,139Impact of new acquisitions - 37,906Profit / loss aside from the main partnership (1,065,500) 3,071,531Balance at the end of the period 98,602,897 98,249,491




Note 28 - Sales Revenues and Costs

A. Gross Profit / Loss from Commercial Activities 01.01-31.12.2011 01.01-31.12.2010Domestic sales 140,253,334 98,817,831International Sales 19,755,408 16,838,920Other Sales 32,907 10,394Total Gross Sales 160,041,649 115,667,145Sales discounts (-) (6,901,113) (5,064,685)Net Sales 153,140,536 110,602,460Cost of sales (-) (133,953,723) (89,702,490)Gross Sales Profit 19,186,813 20,899,970

B. Gross Profit / Loss from Activities in the Finance Sector

01.01-31.12.2011: None (01.01-31.12.2010: None).

Note 29 - Operating Costs 01.01-31.12.2011 01.01-31.12.2010Marketing, selling and distribution expenses (8,037,285) (7,311,042)General management expenses (25,007,589) (20,949,656)Research and development expenses - -Total (33,044,874) (28,260,698)

Note 30 - Qualitative Distribution of Expenses

The details regarding expenses according to their nature for the periods 01.01 - 31.12.2011 and 01.01 - 31.12.2010 are as follows:

01.01-31.12.2011 01.01-31.12.2010Advertising commission and bonus expenses (1,589,140) (2,209,452)Advertising and advertising expenses (1,586,293) (934,887)Distribution, shipping and postal expenses (1,142,648) (406,595)Gross personnel wage expenses(a) (1,062,368) (796,815)Provision expenses for business advances (812,940) (453,964)Promotion expenses (590,743) (1,541,266)Outsourced benefits and services (383,819) (122,387)Market research expenses (150,970) (116,474)Traveling and accommodation expenses (87,365) (83,401)Depreciation and amortization expenses(b) (74,768) (88,442)Expense for the provision of employee termination benefits(c) (27,141) (42,648)Rent Expenses (6,052) (34,047)Maintenance, vehicle rental and insurance expenses (1,806) (271,801)Provision expenses for doubtful receivables - (13,408)Other marketing, sales and distribution expenses (521,232) (195,455)Marketing, Sales and Distribution Expenses (8,037,285) (7,311,042)

01.01-31.12.2011 01.01-31.12.2010Gross personnel wage expenses(a) (8,014,019) (4,509,078)Outsourced benefits and services (4,194,882) (2,152,047)Provision expenses for doubtful trade receivables (2,873,449) (2,182,839)Rent Expenses (2,094,084) (1,440,312)Expense for the provision of employee termination benefits(c) (1,649,833) (2,087,339)Depreciation and amortization expenses(b) (1,477,086) (1,641,517)Maintenance and insurance expenses (1,264,507) (826,783)Taxes, duties and charges (852,991) (658,125)Court, notary, land registry and membership fees expenses (658,294) (1,065,292)Consulting, auditing and advisory expenses (514,783) (227,435)Traveling, transport and accommodation expenses (240,390) (136,992)Expenses regarding the public offering(*) - (3,090,680)Other general management expenses (1,173,271) (931,217)General Management Expenses (25,007,589) (20,949,656)

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(*) TL 2,320,714 of this previous period expense is the public offering expense of one of the Group companies, İhlas Journalism, and the remaining TL 769,966 is the public offering expense of the Holding.

(a) Details regarding gross personnel wage expenses, which is included in the operating expenses, are as follows:

01.01-31.12.2011 01.01-31.12.2010Gross wage expenses (7,787,766) (4,255,403)Social Security deductions (employee and employer) (1,263,929) (646,446)Other expenses (24,692) (404,044)Total (9,076,387) (5,305,893)

(b) The details regarding expenses on depreciation and amortization are as follows:

01.01-31.12.2011 01.01-31.12.2010Cost of sales (4,548,016) (7,156,283)Marketing, sales and distribution expenses (74,768) (88,442)General management expenses (1,477,086) (1,641,517)Total (6,099,870) (8,886,242)

(c) The details regarding the Group's provision expenses for severance pay are as follows:

01.01-31.12.2011 01.01-31.12.2010Cost of sales (1,028,691) (2,405,468)Marketing, selling and distribution expenses (27,141) (42,648)General management expenses (1,649,833) (2,087,339)Total (2,705,665) (4,535,455)

Note 31 - Other Operating Incomes / Expenses

The details regarding other income for the periods 01.01 - 31.12.2011 and 01.01 - 31.12.2010 are as follows:

01.01-31.12.2011 01.01-31.12.2010Rental income 1,861,570 1,160,256Provisions that are no longer required 1,485,579 6,627,503 - Cancellation of liabilities deriving from the contract 750,000 750,000 - Provision for doubtful receivables that are no longer required 341,409 1,167,598 - Provisions for severance pay that are no longer required 185,583 396,725 - Provisions for no longer valid lawsuits 10,000 63,320 - Cancellation of provision for impairment of the brand - 4,249,860 - Provisions no longer required 198,587 -Financial aids 535,053 412,082Profit from the sale of fixed assets 470,232 74,932Treasury discount 17,498 14,593Damage income from insurance - 219,871Reimbursement of expenses regarding the public offering(*) - 914,131Other income 316,756 383,822Total Other Income 4,686,688 9,807,190

(*) This is the portion of İhlas Gazetecilik's, one of the Group companies, expenses related to the public offering of the Company, that is reflected to one of the Company's partners, İhlas Holding.




The details regarding other expenses for the periods 01.01 - 31.12.2011 and 01.01 - 31.12.2010 are as follows:

01.01-31.12.2011 01.01-31.12.2010Tax expenses (under article 6111) (1,882,149) (4,583)Provision expenses for lawsuits (431,792) (132,400)Commission expenses (260,904) (15,271)Private communication tax and latency amounts (10,723) (179,115)Sales loss of subsidiary company - (2,230,132)Expenses derived from reconciliation differences - (124,263)Loss from the sale of fixed assets - (54,152)Other expenses (304,656) (44,916)Total Other Expenses (2,890,224) (2,784,832)

Note 32 - Financial Revenues

The details regarding financial income for the periods 01.01 - 31.12.2011 and 01.01 - 31.12.2010 are as follows:

01.01-31.12.2011 01.01-31.12.2010Rediscounted interest income (including income derived from due date differences) 7,443,399 6,229,147Profit from foreign currencies 4,059,681 3,572,197Interest income 2,945,089 2,804,456Profit from sales of financial investments 218,887 123,545Other financial income 49,400 69,764Total 14,716,456 12,799,109

Note 33 - Financial Expenses

The details regarding financial expenses for the periods 01.01 - 31.12.2011 and 01.01 - 31.12.2010 are as follows:

01.01-31.12.2011 01.01-31.12.2010Foreign exchange losses (3,467,878) (3,650,659)Rediscounted interest expenses (including expenses derived from due date differences) (3,020,831) (1,260,548)Interest expenses (941,316) (1,180,905)Other financial expenses (17,525) (257,181)Total (7,447,550) (6,349,293)

Note 34 - Non-Current Assets Held-for-Sale and Discontinued Operations

A. Fixed Assets Kept for Sales Purposes

31.12.2011: None (31.12.2010: None).

B. Discontinued Operations

01.01-31.12.2011: None (01.01-31.12.2010: None).

Note 35 - Tax Assets and Liabilities

A. Tax Assets and Liabilities of the Current PeriodCorporate tax rate is 20%. Profit shares (dividends) paid to institutions which obtain a revenue through an office in Turkey or through its permanent representative, and institutions which are established in Turkey, are not subjected to withholding tax. Apart from the above mentioned institutions, all paid dividends are subject to a withholding tax at a rate of 15%. Adding the profit to the capital is not considered as a profit distribution. Therefore, it is not subjected to a withholding tax. Advance tax paid during the year belongs to that year and is deducted from the corporate tax which is to be calculated according to the corporate tax return to be presented in the following year.

120

A 75% portion of the gains occurring from sales of the following are exempt from corporate tax: all real estate properties and participation stocks that were among the entities' assets for at least two full years, founder's shares, dividend right certificates and pre emption rights. In order to benefit from the exemption, the gain in question is required to be kept in a fund account under the liabilities section of the balance sheet and they should not be withdrawn for 5 years. It is also required that the selling price should be collected, at the latest, by the end of the second calendar year following the year in which the sale occurs.

According to Corporate Tax Law, all financial losses declared on the returns can be deducted from the corporate tax base of the period, unless they exceed a 5-year period. Returns and related accounting records can be reviewed by the tax authorities for five years in a retrospective manner and tax accounts can be revised.

The main components of the tax expenses as of the dates December 31, 2011, and December 31, 2010, are as follows:

31.12.2011 31.12.2010Tax provisions for the current period 947,750 1,897,636Prepaid taxes (-) (947,750) (1,474,268)Total - 423.368

Reconciliation of the current period tax provisions and the accounting profit as of the dates December 31, 2011 and December 31, 2010 are as follows: 31.12.2011 31.12.2010Current period tax provisions 1,158,612 1,899,366Prepaid taxes (-) (1,063,893) (1,474,268)Total 94,719 425,098

As of the dates December 31, 2011 and December 31, 2010, tax provisions for the period, and reconciliation of accounting profit regarding the Group's subsidiary companies for which a corporate tax base occurs (İhlas Gazetecilik and Alternatif Medya), are as follows:

01.01-31.12.2011 01.01-31.12.2010Accounting Profit / (Loss) 11,484,704 6,774,057Additions (+) 4,233,690 3,083,260Discounts (-) (745,208) (237,176)Financial losses used (-) (9,180,126) (123,313)Financial Profit / (Loss) 5,793,060 9,496,828Tax rate 20% 20%Tax Provision Amount 1,158,612 1,899,366

The main components of the tax expenses which are reflected in the comprehensive income statement as of the periods January 01 - December 31, 2011, and January 01 - December 31, 2010, are as follows:

01.01-31.12.2011 01.01-31.12.2010Current period corporate tax (1,158,612) (1,899,366)Deferred tax income / (expense) 974,825 257,977Balance at the end of the period (183,787) (1,641,389)

B. Deferred Tax Assets and Liabilities

The Group calculates the assets and liabilities of the income tax, by taking into consideration the effects of the temporary differences between the evaluations of the items in the balance sheet IFRS and the legal tables. The temporary differences in question are generally caused by the recognition of income and expenses according to IFRS and tax laws in different reporting periods.

Corporate tax rate for the year 2011 is 20% (31.12.2010: 20%). Therefore the tax rate applied to the deferred tax assets and liabilities, which are calculated according to the Liability Over Temporary Differences Method, is 20%.

The detailed list prepared by using the enacted tax rates of the accumulated temporary differences, deferred tax assets and liabilities as of the dates December 31, 2011, and December 31, 2010, is as follows:




31.12.2011 31.12.2010 Total Deferred Total Deferred Temporary Tax Asset / Temporary Tax Asset /Deferred Tax Associated with the Income Statement Differences (Liability) Differences (Liability)Temporary differences regarding investment purpose real estate properties and tangible fixed assets (25,670,783) (5,134,157) (27,099,282) (5,419,856)Temporary differences regarding intangible fixed assets (82,595,450) (16,519,090) (81,603,348) (16,320,670)Rediscount regarding payables (396,222) (79,244) (443,322) (88,664)Foreign exchange difference income / expense (derived from the differences between foreign exchange rates) (25) (5) - -Temporary differences regarding tangible fixed assets 20,110,044 4,022,009 25,217,335 5,043,467 Temporary differences regarding intangible fixed assets 26,589,090 5,317,818 20,353,552 4,070,710 Provisions for employee termination benefits 9,528,218 1,905,644 8,106,846 1,621,369 Provision for doubtful receivables 6,139,324 1,227,865 5,745,837 1,149,167 Rediscount regarding receivables 4,197,166 839,434 2,691,127 538,225 Business advances 2,274,252 454,850 1,141,749 228,350 Inventory 510,934 102,187 920,511 184,102 Provisions for other liabilities 83,187 16,637 750,000 150,000 Unpaid social security accruals 221,372 44,274 690,017 138,005 Provision expenses for lawsuits 591,026 118,205 325,031 65,006 Provisions for other receivables 26,200 5,240 83,187 16,637 The amount of maturity differences in inventories - - 47,543 9,509 Reduced financial losses 17,601,865 3,520,373 17,409,292 3,481,858 Gross deferred tax liability (108,662,480) (21,732,496) (109,145,952) (21,829,190)Gross deferred tax asset 87,872,678 17,574,536 83,482,027 16,696,405 Net deferred tax assets / (liabilities) (20,789,801) (4,157,960) (25,663,925) (5,132,785)

Behavior chart of the net deferred tax assets is as follows: 01.01-31.12.2011 01.01-31.12.2010Balance on January 1 (5,132,785) (5,867,224)Deferred tax income / (expense) 974,825 257,977Impact of new acquisitions - 476,462Balance at the end of the period (4,157,960) (5,132,785)

In the Group's consolidated financial statements for the year that ends on December 31, 2011, which were prepared in accordance with International Financial Reporting Standards, the Group has calculated a deferred tax asset for deductible financial losses that amounts to TL 17,601,865 (31.12.2010: TL 17,409,292).

As of December 31, 2011 and December 31, 2010, the maturities of the financial losses in question are as follows:

Expiration (Timeout) Dates 31.12.2011 31.12.20102011 - 7,467,7832012 9,418,017 4,709,0092013 1,046,547 1,242,3332014 985,051 1,958,3492015 3,533,232 2,031,8182016 2,619,018 -Total 17,601,865 17,409,292

Deferred tax assets are reflected in the books for all deductible temporary differences in proportion with the probability of occurrence of a financial profit that can be benefited. As of the date December 31, 2011, the Group's deductible financial losses, for which a deferred tax asset is not calculated, are TL 8,929,835. The related maturities are as follows:

31.12.2011 31.12.20102011 4,349,246 1,944,9492012 3,607,292 4,233,1552013 973,297 3,549,246Total 8,929,835 9,727,350

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The reconciliation regarding tax expenses, which are calculated by multiplying tax expense and pre-tax profit by the tax rate, is as follows:

31.12.2011 31.12.2010Profit / (Loss) Before Tax 4,110,255 6,061,376 Calculated tax expense (20%) 822,051 (1,212,275) - The effect of income and expenses which are legally disallowed 697,696 778,879 - The recognition of deferred tax assets which are caused by the Group's financial losses 1,836,025 294,222 - The Group's tax loss which is not subjected to statutory tax or deferred tax, and the periodical effect of correction records (3,539,559) (1,502,215)Tax Income / (Expense) (183,787) (1,641,389)

Note 36 - Earnings per Share

As of the dates December 31, 2011 and December 31, 2010, the weighted average of the Group's shares, and calculations regarding profit per share, are as follows:

01.01-31.12.2011 01.01-31.12.2010Earnings / (loss) obtained from ongoing activities, per share: The main partnership's net profit / (loss) for the period, regarding ongoing activities 4,991,968 1,348,456The weighted average number of shares with a value of TL 1, each 200,000,000 200,000,000Earnings / (loss) obtained from the ongoing activities, per share (TL) 0.02 0.01Earnings / (loss) per share: Net profit / loss for the period 3,926,468 4,419,987Net profit / (loss) of minority shareholders for the period (1,065,500) 3,071,531Net profit / (loss) of main partnership for the period 4,991,968 1,348,456The weighted average number of shares with a value of TL 1, each 200,000,000 200,000,000Earnings / (Loss) per Share (TL) 0.02 0.01

The reconciliation of the number of stock shares of the Group at the beginning and by the end of the period is as follows:

31.12.2011 31.12.2010The number of weighted stock shares at the beginning of the period 200,000,000 200,000,000The number of weighted stock shares at the end of the period 200,000,000 200,000,000

No income per dilutive share has been calculated as the Group has no dilutive potential ordinary shares (Previous period: None).

There is no accrued dividends in the current period (Previous period: None).




Note 37 - Related Party Disclosures

A. The Group's existing account balances (net book value) with its partners, indirect capital through its partners, the management, the major companies with whom the Group has a business relationship, and with the Group's key personnel, as of 31 December 2011 and 31 December 2010 are as follows: 31.12.2011 31.12.2010Receivables from Shareholders and Parties Associated with Shareholders İhlas Pazarlama 19,973,655 5,727,088İhlas Holding 5,626,358 911,283Armutlu Tatil Köyü 927,302 1,490,654İhlas Ev Aletleri 136,843 335,985Tasfiye Halinde İhlas Finans 24,835 -İhlas Dış Ticaret 57,371 45,533İhlas İnşaat Proje 9,064 3,234İhlas Motor 54,586 15,072Kristal Kola 18,139 6,437İhlas Kimya 18,672 16,350Kuzuluk Kaplıcaları 14,041 5,986Bur-yal 16,878 -İhlas Enerji 11,457 10,638İhlas Oxford 8,973 7,353Detes Enerji 5,618 5,216Mir Madencilik 3,113 1,088İnşaat Holding - 3,706Pazarlama Yatırım Holding - 3,369Joint Venture - 4 - 114,258İhlas Yapı - 40,133Joint Venture - 3 - 1,664Joint Venture - 1 - 1,664Joint Venture - 2 - 1,664Receivables from shareholders - 448,379Total 26,906,905 9,196,754

An interest number is processed and an interest is accrued for receivables from the related parties which exceed the limits of commercial size. 31.12.2011 31.12.2010Payables to Shareholders and Parties Associated with Shareholders İhlas Pazarlama 252,143 4,503,176İhlas Holding 292,673 2,800,498İhlas Net 188,926 133,974İhlas Madencilik 250,875 -İhlas İnşaat Proje 61,080 -İhlas Ev Aletleri 76,437 16,561Şifa Yemek 47,289 -KPT Lojistik 71,285 -İhlas Net Ltd. 35,407 18,137İhlas İletişim 662 2,142İhlas Antrepo 642 265Kristal Gıda 72 -Payables to Other Associated Parties (Key Personnel) 62,347 87,150Total 1,339,838 7,561,903

31.12.2011 31.12.2010Advances Given to Related Parties İhlas Pazarlama 925,596 136,218İhlas Madencilik - 402,177İhlas Holding - 4,424Total 925,596 542,819

124

31.12.2011 31.12.2010Advances Received from Related Parties İhlas Pazarlama - 46,299Total - 46,299

B. The Group's sales to and purchases from its partners, indirect capital through its partners, the management and the major companies with whom the Group has a business relationship, within the periods January 1 - December 31, 2011 and January 1 - December 31, 2010, are as follows:

01.01-31.12.2011 Advertising Service Goods Advertising Service Goods Sales Sales Sales Purchases Purchases PurchasesArmutlu Tatil Köyü 2,547,600 34,300 - - 743 -İhlas Pazarlama 196,299 640,924 2,550,621 101,974 3,584,998 636Bispa 190,053 - - - - -İhlas Holding 177,215 290,050 6,873,894 - 812,212 -Kuzuluk Kaplıcaları 50,129 62,217 6,356 - 16,663 -Bisan 45,000 - - - - -Kristal Gıda 38,453 2,970 - - - -Kristal Kola 35,683 20,550 - - - -İhlas İnşaat Proje 9,619 150,707 - - - -İhlas Motor 4,020 3,339 - - - -İhlas Ev Aletleri 3,043 485,452 - - 216 -Şifa Yemek 3,017 9,128 - - 445,806 -İhlas Antrepo 900 - - - 900 -İhlas Net 120 8,015 - - 211,381 -Mir Maden 103 - - - - -Joint Venture - 4 8,344 11,004 - - - -Joint Venture - 3 - 5,932 - - - -İhlas Net Ltd. 15,120 7,395 - 17,358 102,439 -Tasfiye Halinde İhlas Finans - 1,675 - - - -İhlas Madencilik - 403 - - 60,838 -İhlas Motor - 250 - - - -KPT Lojistik - - - - 582,622 13,980Detes Maden Ltd. - - - - 410 -Total 3,324,718 1,734,311 9,430,871 119,332 5,819,228 14,616

01.01-31.12.2010 Advertising Service Goods Advertising Service Goods Other Sales Sales Sales Purchases Purchases Purchases Expenses Promaş 6,649,160 24,049 - 268,190 83,851 - -Armutlu Tatil Köyü 1,586,000 112,935 - - 1,815 - -İhlas Holding (1) 973,721 260,994 6,104 - 699,695 - -İhlas Pazarlama 631,915 470,737 6,973 617,810 3,033,117 549,018 -İhlas Reklam 391,358 250 - 33,000 - -İhlas Ev Aletleri 132,459 521,715 - - 54 - -Kristal Kola 46,334 37,554 - - 116 - -Kuzuluk Kaplıcaları 39,750 44,776 - - 15,920 - -İhlas Motor 22,989 19,975 - - - - -İhlas Net 3,360 910 - - 171,265 - -Joint Venture - 1 - 14,110 - - - - -Tasfiye Halinde İhlas Finans - 630 - - - - -İhlas Madencilik - 524 - - - - -Kristal Gıda - 500 - - - - -Joint Venture - 2 - 370 - - - - -Bayındır Madencilik - 200 - - - - -İhlas Net Ltd. - - 800 - 96,365 90 -Joint Venture - 4 - - - - - - 18,270İhlas Antrepo - - - - 1,313 - -Total 10,477,046 1,510,229 13,877 919,000 4,103,511 549,108 18,270

(1) TL 914,131 of this amount is the portion of İhlas Gazetecilik's, which is one of the Group companies, advertising expenses related to the public offering of the Company, and is reflected to one of the Company's partners, İhlas Holding.




C. Interest, rent and other income / expenses that are received or paid by the Group from and to its partners, indirect capital through its partners, the management and the major companies with whom the Group has a business relationship, within the periods January 1 - December 31, 2011 and January 1 - December 31, 2010, are as follows:

01.01-31.12.2011 Interest Rent Other Asset Interest Rent Other Asset Revenues Revenues Income Sales Expenses Expenses Expenses Purchases İhlas Pazarlama 1,350,149 202,327 2,709 82,267 56,343 110,735 12,354 15,320İhlas Holding 381,785 554,862 153,590 - 107,618 463,300 59,350 -Joint Venture - 4 159,493 103,992 - - 122,832 - - -İhlas Ev Aletleri 20,011 1,800 - - - 575,901 - -İhlas Madencilik 25,873 - - - 6,496 329,214 - -Tasfiye Halinde İhlas Finans - 135,900 - - - - - -İhlas Motor - 64,126 - - - - - -İhlas İnşaat Proje - 54,736 - - - - - -İhlas Yapı - 8,400 - - - - - -İhlas Dış Ticaret 1,296 7,680 - - - - - -Armutlu Tatil Köyü - 4,500 - - - - - -Joint Venture - 1 - 3,150 - - - - - -Joint Venture - 2 - 4,200 - - - - - -Joint Venture - 3 - 4,200 - - - - - -Kuzuluk Kaplıcaları - 2,700 - - - - - -Mir Maden - 1,778 - - - - - -İhlas Zahav - 1,566 - - - - - -Bur-Yal - 960 - - - - - -İhlas Oxford - 960 - - - - - -İnşaat Holding - 900 - - - - - -Pazarlama Yatırım Holding - 900 - - - - - -İhlas Kimya - 900 - - - - - -İhlas Net - - - - 4,126 - - -Detes Maden Ltd. - - - - - 14,999 - -Total 1,938,607 1,160,537 156,299 82,267 297,415 1,494,149 71,704 15,320

01.01-31.12.2010 Interest Rent Other Interest Rent Asset Revenues Revenues Income Expenses Expenses Purchases İhlas Holding 869,485 201,915 23,752 87,573 596,158 -İhlas Pazarlama 690,805 106,385 3,561 - 703,609 18,925,000Joint Venture - 4 255,115 1,519 - 70,870 - -Armutlu Tatil Köyü 66,308 3,661 - - - -Promaş 38,517 45,000 - - - -İhlas Ev Aletleri 27,886 1,475 - - 380,313 -İhlas Reklam 10,699 10,128 - - - -İhlas Dış Ticaret 4,327 5,898 - - - -Tasfiye Halinde İhlas Finans - 43,932 - - - -İhlas Yapı - 33,422 - - - -İhlas Oxford - 6,712 - - - -Kuzuluk Kaplıcaları - 4,424 - - - -İhlas Kimya - 4,424 - - - -İhlas Motor - 3,661 - - - -Detes Enerji - 3,661 - - 22,481 Bur-yal - 3,661 - - - -İnşaat Holding - 3,383 - - - -İhlas Madencilik - 3,076 - 76,372 - -Pazarlama Yatırım Holding - 3,075 - - - -İhlas Enerji - 2,949 - - - -İhlas İnşaat Proje - 2,214 - - - -Joint Venture - 1 - 1,519 - - - -Joint Venture - 2 - 1,519 - - - -Joint Venture - 3 - 1,519 - - - -İhlas Zahav Otomotiv - 1,014 - - - -Mir Madencilik - 993 - - - -İhlas Net - - 5,302 - -İhlas İletişim - - - - - 2,441Total 1,963,142 501,139 27,313 240,117 1,702,561 18,927,441

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D. The short-term benefits provided to the Group's key management personnel in the periods January 1 - December 31, 2011 and January 1 - December 31, 2010 are as follows:

01.01-31.12.2011: TL 1,341,13001.01-31.12.2010: TL 1,001,287

E. The long-term benefits provided to the Group's key management personnel in the periods January 1 - December 31, 2011 and January 1 - December 31, 2010 are as follows:

None (Previous period: None).

Note 38 - Nature and Extent of Risks Arising from Financial Instruments

The (net) book values of the financial assets and liabilities that are denominated in foreign currencies as of the dates December 31, 2011 and December 31, 2010 are as follows: 31.12.2011 31.12.2010A. Foreign currency assets 2,858,362 14,199,690B. Foreign currency liabilities 10,000,991 9,318,429Net Foreign Exchange Position (A-B) (7,142,629) 4,881,261

FOREIGN EXCHANGE POSITION CHART 31.12.2011 31.12.2010 TL Equivalent US$ EURO Other TL Equivalent US$ EURO Other1. Trade Receivables 568,937 68,324 179,998 - 2,657,787 1,609,489 82,727 -2a. Monetary Financial Assets (Including Cash and Bank Accounts) 2,055,881 718,989 285,531 - 8,062,910 5,002,444 160,622 -2b. Non-Monetary Financial Assets - - - - - - - -3. Other 193,707 94,525 4,100 1,762 3,418,029 1,673,758 404,169 9284. Current Assets (1+2+3) 2,818,525 881,838 469,629 1,762 14,138,726 8,285,691 647,518 9285. Trade Receivables - - - - - - - -6a. Monetary Financial Assets - - - - - - - -6b. Non-Monetary Financial Assets - - - - - - - -7. Other 39,837 21,090 - - 60,964 22,160 13,033 -8. Fixed Assets (5+6+7) 39,837 21,090 - - 60,964 22,160 13,033 -9. Total Assets (4+8) 2,858,362 902,928 469,629 1,762 14,199,690 8,307,851 660,551 92810. Trade Payables 2,621,296 1,198,865 139,386 29,633 2,170.352 1,007,599 284,821 36,88311. Financial Liabilities 3,642,321 501,625 1,102,710 - 3,118,484 428,449 1,198,624 -12a. Other Monetary Liabilities - - - - - - - -12b. Other Non-Monetary Liabilities 233,933 122,582 977 - 1,255,931 657,937 116,519 -13. Short-Term Liabilities (10+11+12) 6,497,550 1,823,072 1,243,073 29,633 6,544,767 2,093,985 1,599,964 36,88314. Trade Payables - - - - - - - -15. Financial Liabilities 3,502,834 976,292 678,745 - 2,773,662 655,519 859,026 -16a. Other Monetary Liabilities 607 279 33 - - - - -16b. Other Non-Monetary Liabilities - - - - - - - -17. Long-Term Liabilities (14+15+16) 3,503,441 976,571 678,778 - 2,773,662 655,519 859,026 -18. Total Liabilities (13+17) 10,000,991 2,799,643 1,921,851 29,633 9,318,429 2,749,504 2,458,990 36,88319. Net Asset / (Liability) Position of Off-Balance Sheet Derivative Instruments (19a-19b) - - - - - - - -19a. Amount of Off-Balance Sheet Derivative Instruments of an Active Nature, Denominated in Foreign Exchange - - - - - - - -19b. Amount of Off-Balance Sheet Derivative Instruments of a Passive Nature, Denominated in Foreign Exchange - - - - - - - -




20. Net Foreign Currency Asset / (Liability) Position (9-18+19) (7,142,629) (1,896,715) (1,452,222) (27,871) 4,881,261 5,558,347 (1,798,439) (35,955)21. Net Foreign Asset / (Liability) Position of Monetary Items (l + 2a + 5 + 6a - 10 - 11 - 12a - 14 - 15 - 16a) (7,142,240) (1,889,748) (1,455,345) (29,633) 2,658,199 4,520,366 (2,099,122) (36,883)22. Total Fair Value of Financial Instruments used for Foreign Exchange Hedge - - - - - - - -23. Amount of Hedged Portion of Foreign Exchange Assets - - - - - - - -24. Amount of Hedged Portion of Foreign Exchange Liabilities - - - - - - - -25. Exports 19,342,057 6,981,956 3,226,907 - 16,929,037 6,486,570 3,577,046 -26. Imports 38,107,569 12,880,528 5,481,937 8,319 23,591,329 8,226,414 5,616,925 64,000 There is no obligation for the hedging of foreign currency as the Group has no maturity transactions as of the dates December 31, 2011 and December 31, 2010. Hedging ratio of imports from total foreign currency liabilities is exchange rate risk through a derivative instrument liability for returning the total foreign exchange rate.

Note 39 - Financial Instruments

A) Capital risk managementThe Group aims to enhance its profit and market value by maintaining an efficient debt and equity balance while trying to ensure continuity of operations in capital management.

The Holding's capital structure, formed by debts and loans which are described in Notes 8 and 9, and the paid-in capital, capital reserves, restricted profit reserves and equity components including prior years' profits/losses explained in Note 27.

Risks associated with each class of capital and the Group's cost of capital are evaluated by the senior management of the Group. During this evaluation, senior management evaluates the risks associated with each class of capital and cost of capital, and presents those dependent on the decision of the Board of Directors for the evaluation of the Board of Directors. The Group optimizes diversification of capital, based on the evaluation of the senior management and the Board of Directors by acquisition of new debt, repayment of existing debt and / or capital increase. The Group's overall strategy is not different from the previous period.

The Group monitors the capital adequacy by using the debt/equity ratio. The calculation of this ratio is performed through dividing the net debt by total shareholders' equity. Net debt is calculated by deducting cash and cash equivalents from the total debt amount (short-and long-term loans in the balance sheet, include trade and other payables). 31.12.2011 31.12.2010Total liabilities 63,640,993 67,701,198Minus: Cash and cash equivalent values (Note 6) (10,085,865) (29,115,852)Net liability 53,555,128 38,585,346Total shareholders' equity (Note 27) 280,153,237 274,807,110The ratio of net liability /shareholders' equity 19% 14%

B) Significant accounting policies The significant accounting policies of the Group regarding financial instruments are described in detail in the "Financial Instruments" section within footnote No: 2 "Summary of Significant Accounting Policies".

C) Financial risk management objectivesCurrently, a Group-wide defined risk management model or its active applications are not present. Exchange rate risk, interest rate risk and liquidity risk are among the significant financial risks of the Group.

Although there are no defined risk management models, the Group manages its risks through decisions it takes, and through the implementation of these decisions. Forming a corporate risk management model is targeted and this aim is currently a work in progress.

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D) The market riskDue to its activities, the Group is exposed to financial risks regarding fluctuations in currency exchange rates and interest rates. Distribution of revenue and expenses according to foreign exchange types and distribution of debts according to foreign exchange rates, and variable and fixed interest rates are monitored by the Group's management.

The changes in market conditions leading to market risk include benchmark interest rate, price of financial instrument of another company, commodity price, exchange rate or price or differences in the rate index.

Management of changes in inventory prices (price risk)The Group is subjected to a price risk because of the selling prices being affected by price changes of stocked raw materials. There is no derivative instrument that can be used to avoid the negative effects of price movements on selling price margins. The Group tries to reflect raw material price changes by taking the balances of production-order-purchase according to future price movements for raw materials.

Risk management for foreign currency ratioThe Group becomes indebted through fixed interest rates. The interest rates regarding the Group's liabilities are described in detail in footnote No: 8.

Interest Position Table 31.12.2011 31.12.2010 Financial instruments with fixed rate Financial assets Financial assets to be kept until maturity 5,640,616 26,297,168 Financial assets that are ready for sale - -Financial liabilities (bank loans) 193,474 187,810 Financial instruments with variable interest rateFinancial assets - -

Financial liabilities - -

As of the dates December 31, 2011 and December 31, 2010, if the base point of interest were to be changed by 100 points, which means if interest rates were changed by 1%, and if all other variables could be held constant, a net interest expense / income would have emerged due to the interest change applied on the financial instruments with fixed interest rates. In this case the pre-tax net profit / loss for the current period would be TL 948 (31.12.2010: TL 2,642 ) higher / lower.

The Group's interest rate sensitivity is as follows:

Interest Rate Sensitivity Analysis Table 31 December 2011 31 December 2010 Profit / Loss Profit / Loss Increase of Decrease of Increase of Decrease of basis point basis point basis point basis point In case basis point is 100 (1%): TL (948) 948 (2,642) 2,642US$ - - - -Total Effect of Financial Instruments with Fixed Rate - - - -

In case basis point is 100 (1%):Effect of Financial Instruments with Variable Interest Rate - - - -Total (948) 948 (2,642) 2,642

Foreign currency risk managementThere is a natural balance between the income and expenses of the Group in terms of exchange rate risk. It is attempted to protect this balance by including predictions for the future and taking the market conditions into consideration.

As of the dates December 31, 2011 and December 31, 2010, if the currency unit TL were to change by 10% against US$, EURO and other foreign currency units, and if all other variables could be held constant, the pre-tax net profit / loss derived for the current period, which resulted from the net foreign exchange profit / loss of the assets and liabilities denominated by these currency units, would be TL 714,263 (31.12.2010 : TL 488,126) higher / lower.




The exchange rate sensitivity analysis table regarding the Group's foreign exchange position is as follows:

Exchange Rate Sensitivity Analysis Table 31 December 2011 31 December 2010 Profit / Loss Profit / Loss Appreciation of Depreciation of Appreciation of Depreciation of foreign currency foreign currency foreign currency foreign currency In case of a 10% change in US$ currency: 1- Net US$ assets / (liabilities) (358,270) 358,270 859,320 (859,320)2- Part protected from US$ risk (-) - - - -3- US$ Net Impact (1+2) (358,270) 358,270 859,320 (859,320) In case of a 10% change in EURO currency: 4- Net EURO assets / (liabilities) (354,894) 354,894 (368,518) 368,5185- Part protected from EURO risk (-) - - - -6- EURO Net Impact (4+5) (354,894) 354,894 (368,518) 368,518 In case of a 10% change in other currencies: 7- Net assets in other foreign currency / (liabilities) (1,099) 1,099 (2,676) 2,6768- Part protected from other foreign currency risk (-) - - - -9- Other Currency Assets Net Impact (7+8) (1,099) 1,099 (2,676) 2,676Total (3+6+9) (714,263) 714,263 488,126 (488,126)

E) Credits and collection risk management The credits and collection risk of the Group is basically related to its trade receivables. The amount shown in the balance sheet consists of the net amount which is obtained after the deduction of doubtful receivables predicted by the Group, due to its past experiences and current economic conditions. The Group's credit risk has been distributed as the Group has been working with a large number of customers and there is no significant concentration of credit risk.

Exposed credit risks in terms of financial instrument types:

31 Aralık 2011 Receivables Trade Receivables Other Receivables Related Other Related Other Deposit at Cash and Party Party Party Party Bank Other Maximum credit risk exposed as of the reporting date (A+B+C+D+E)(1) 26,906,905 42,682,432 - 505,588 8,273,322 1,812,543Part of maximum risk secured by Guarantee etc. - - - - - -A. Net book value of financial assets which are neither overdue nor subjected to impairment(2) 26,906,905 42,320,268 - 505,588 8,273,322 1,812,543B. Book value of financial assets with renegotiated conditions, which would have been overdue or considered to be subjected to impairment - - - - - -C. Net book value of assets which are overdue but not subjected to impairment(3) - - - - - -- Part secured by Guarantee etc. - - - - - -D. Net book value of assets subjected to impairment(4) - 362,164 - - - -- Overdue (gross book value) 112,307 12,256,238 - - - -- Impairment (-) (112,307) (11,894,074) - - - -- Part of the net value secured by Guarantee etc. - - - - - -- Undue (gross book value) - - - - - -- Impairment (-) - - - - - -- Part of the net value secured by Guarantee etc. - - - - - -E. Off-balance sheet items with credit risk - - - - - -

(1) Factors that increase the reliability of credit, such as received guarantees, were not taken into account when determining the amount. (2) An impairment and credit risk is expected for financial assets which are neither overdue nor impaired in their present condition.(3) For financial assets which are overdue but have not been subjected to impairment, impairment is not expected in the future either, as the guarantees and / or maturities regarding these financial assets are short-term. There are no financial assets which are overdue but not subjected to impairment as of December 31, 2011.

130

(4) The ageing analysis for financial assets which are overdue and impaired as of 31.12.2011 is as follows:

December 31, 2011 Receivables Overdue Amount Doubtful Receivables Provisions

1 - 30 days overdue 276,993 (27,699)1 - 3 months overdue 18,800 (6,580)3 - 12 months overduet 405,180 (304,530)1 - 5 years overdue 11,372,124 (11,372,124)More than 5 years overdue 295,448 (295,448)Total 12,368,545 (12,006,381)Part secured by Guarantee etc. - -

December 31, 2010 Receivables Trade Receivables Other Receivables Related Other Related Other Bank Cash and Party Party Party Party Deposits Other Maximum credit risk exposed as of the reporting date (A+B+C+D+E)(1) 8,748,375 56,864,776 448,379 518,011 27,884,623 1,231,229Part of maximum risk secured by Guarantee etc. - - - - - -A. Net book value of financial assets which are neither overdue nor subjected to impairment(2) 8,748,375 55,987,640 448,379 518,011 27,884,623 1,231,229B. Book value of financial assets with renegotiated conditions, which would have been overdue or considered to be subjected to impairment - - - - - -C. Net book value of assets which are overdue but not subjected to impairment(3) - - - - - -- Part secured by Guarantee etc. - - - - - -D. Net book value of assets subjected to impairment(4) - 877,136 - - - -- Overdue (gross book value) - 10,351,477 - - - -- Impairment (-) - (9,474,341) - - - -- Part of the net value secured by Guarantee etc. - - - - - -- Undue (gross book value) - - - - - -- Impairment (-) - - - - - -- Part of the net value secured by Guarantee etc. - - - - - -E. Off-balance sheet items with credit risk - - - - - -

(1) Factors that increase the reliability of credit, such as received guarantees, were not taken into account when determining the amount.(2) An impairment and credit risk is expected for financial assets which are neither overdue nor impaired in their present condition.(3) For financial assets which are overdue but have not been subjected to impairment, an impairment is not expected in the future either, as the guarantees and / or maturities regarding these financial assets are short-term. There are no financial assets which are overdue but not subjected to impairment as of December 31, 2010.

(4) The ageing analysis for financial assets which are overdue and impaired as of 31.12.2010 is as follows:

December 31, 2010 Receivables Overdue Amount Doubtful Receivables Provisions

1 - 30 days overdue 57,935 (5,794)1 - 3 months overdue 99,251 (34,738)3 - 12 months overdue 2,076,386 (1,315,904)1 - 5 years overdue 6,210,763 (6,210,763)More than 5 years overdue 1,907,142 (1,907,142)Total 10,351,477 (9,474,341)Part secured by guarantee etc. - -




F) Liquidity risk management The Group manages liquidity risk by following the estimated and actual cash flows regularly while supplying sufficient funds and maintaining continuity of debt reserves by matching their maturities and liabilities.

31.12.2011 Total Cash Outflows Book as per the terms Less than Between 3 - Between 1 -Maturities as per the terms of agreement Value of agreement 3 months 12 months 5 yearsNon-Derivative Financial Liabilities 12,955,526 14,061,961 4,691,625 4,665,123 4,705,213Bank Loans 193,474 230,446 48,729 134,455 47,262Finance Lease Obligations 7,145,155 8,116,970 1,168,383 2,873,836 4,074,751Trade Payables(*) 1,587,878 1,685,526 718,104 384,222 583,200Other Debts and Liabilities(**) 4,029,019 4,029,019 2,756,409 1,272,610 -

Book Total Expected Less than Between 3 - Between 1 -Expected Maturities Value Cash Outflows 3 months 12 months 5 yearsNon-Derivative Financial Liabilities 19,424,753 19,873,424 7,544,905 11,369,620 958,899Bank Loans (of uncertain maturities)(***) 1,968,805 1,968,805 - 1,968,805 -Trade Payables(****) 10,774,607 11,041,753 5,069,938 5,971,815 -Other Debts and Liabilities 6,681,341 6,862,866 2,474,967 3,429,000 958,899

Total Cash Outflows Maturities Expected Book Expected/as per the Less than Between 3 - Between 1- (or as per the terms of agreement) Value terms of agreement 3 months 12 months 5 yearsDerivative Cash Inflows - - - - -Derivative Cash Outflows - - - - -

(*) As indicated by TCC, promissory notes are contracts between two parties. Therefore, notes payable are observed in this group.(**) Liabilities with legal payment periods, such as tax provisions, tax installments, taxes payable and social security premiums, are observed in this group.(***) There are revolving loans and they have unidentified maturities. They are observed in the 3 - 12 months section.(****) Suppliers and other trade payables are observed within this group.

132

31.12.2010 Total Cash Outflows Book as per the terms Less than Between 3 - Between 1 -Maturities as per the terms of agreement Value of agreement 3 months 12 months 5 yearsNon-Derivative Financial Liabilities 11,431,920 11,491,031 4,272,762 4,376,363 2,841,906Bank Loans 187,810 187,810 33,429 86,137 68,244Finance Lease Obligations 5,892,146 5,892,146 821,015 2,297,469 2,773,662Trade Payables(*) 2,934,333 2,993,444 1,682,240 1,311,204 -Other Debts and Liabilities(**) 2,417,631 2,417,631 1,736,078 681,553 -

Book Total Expected Less than Between 3 - Between 1 -Expected Maturities Value Cash Outflows 3 months 12 months 5 yearsNon-Derivative Financial Liabilities 26,333,242 26,725,287 2,475,802 23,117,710 1,131,775Bank Loans (of uncertain maturities)(***) 1,970,865 1,970,865 - 1,970,865 -Trade Payables(****) 17,443,292 17,817,646 812,932 16,896,270 108,444Other Debts and Liabilities 6,919,085 6,936,776 1,662,870 4,250,575 1,023,331

Total Cash Outflows Maturities Expected Book Expected/as per the Less than Between 3 - Between 1- (or as per the terms of agreement) Value terms of agreement 3 months 12 months 5 yearsDerivative Cash Inflows - - - - -Derivative Cash Outflows - - - - -

(*) As indicated by TCC, promissory notes are contracts between two parties. Therefore, notes payable are observed in this group.(**) Liabilities with legal payment periods, such as tax provisions, tax installments, taxes payable and social security premiums, are observed in this group.(***) There are revolving loans and they have unidentified maturities. They are observed in the 3 - 12 months section.(****) Suppliers and other trade payables are observed within this group.

G) Hedge AccountingIn order to protect derivative products from the buying and selling process and from foreign currencies and / or interest rates (fixed and variable), the Group performs forward, future, option and swap transactions.

Note 40 - Subsequent Events (Events After the Balance Sheet Date)

Endorsement of the financial statementsThe Holding's consolidated financial statements dated 31.12.2011 were endorsed by the Holding's Board of Directors on 20.03.2012. The only authority with the power to make changes on the consolidated financial statements endorsed by the Holding's Board of Directors is the Holding's General Assembly.

Increase of the Participation Share in IHAThe Holding decided to acquire all of the 25% shares of İhlas Marketing in İhlas News, one of the group companies, through Güreli Yeminli Mali Müşavirlik ve Bağımsız Denetim Hizmetleri A.Ş. according to the valuation report based on "Discounted Future Cash Flow Analysis Method" with respect to the information dated September 30, 2011 at a price of TL 22,625,000 at the Board of Directors Meeting held on January 23, 2012.

Note 41 - Other Matters that may Affect the Financial Statements to a Significant Extent or Matters which are Required to be Explained in Order for the Financial Statements to be clear, interpretable and understandable

None.



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